New Delhi, July 19 (IANS) The process to put in place a framework for cross-border insolvency cases has been initiated by India, Insolvency and Bankruptcy Board of India (IBBI) Chairman M.S. Sahoo said on Thursday.
Briefing reporters at the certificate distribution ceremony here for the first batch of valuers registered with the IBBI, Sahoo said the government is keen to introduce a globally accepted cross-border insolvency framework, which would also make India an attractive investment destination for foreign creditors.
“We are conducting round-table meetings to understand the situation, and the process is on,” he said regarding the status of the framework on cross-border insolvency.
“We are always ready to amend the law, as and when somebody tells this is a problem. We have amended six times in the last one-and-half years. So, as and when there is a problem, we will amend. We have no hesitations,” he said of the relatively recent insolvency process enacted in the country in response to the massive non-performing assets (NPAs), or bad loans, accumulated by public sector banks (PSBs) mostly through corporate sector debt.
The NPAs in the Indian banking system have reached a staggering level of Rs 9 lakh crore, while the bad loans of only the state-run banks add up to nearly Rs 8 lakh crore.
The government has embarked on a two-pronged strategy on bad loans.
On the one hand, it has brought in the Insolvency and Bankruptcy Code (IBC) which provides for a six-month time-bound insolvency resolution process, and on the other, it has adopted the recapitalisation plan to support the PSBs.