Over 250 insolvency cases settled

The Insolvency and Bankruptcy Code (IBC) is beginning to show its effect on defauting borrowers who are preferring amicable resolution with creditors to facing legal proceedings.
 
Till date, over 25O cases have been settled under IBC by the Mumbai bench of the National Company Law Tribunal (NCLT) even before admission stage, according to Mukul Shrawat, judicial member, NCLT, in Mumbai.
 
The positive effect of IBC is being felt. The message is quite clear to borrowers — if they have taken debt, it has to be repaid. Many have preferred settlement with creditors even before admission of cases at the forum, Shrawat said in an “insolvency summit” here.

 

Shrawat said that earlier a “chalta hai” attitude — to keep pending payment of dues to lenders — was the norm. Now, the need to settle dues and close litigation is becoming clear. He blamed lack of due diligence before granting loans for the bad loans. Bankers often drew comfort by creating collateral security of property.
 
Banks have to examine the profitability of businesses to which loans are being granted. There is need to revise the checklist (norms) for carrying out due diligence to cure the menace of non-performing loans, he said.
 
“IBC is a new legislation. The roll-out of the code, till date, shows it will have a beneficial effect on the system. Yet, there could be concerns over day-to-day problems in its implementation. Insolvency professionals should form a nationwide organisation to take up such matters for early solutions,” he said.

 
The NCLT member also batted for a panel on the lines of the committee formed for the goods and services tax to expeditiously address problems.