High and dry in the IBC era

The Insolvency and Bankruptcy Code has altered the relationship between debtors and creditors for the better, but small and medium enterprises have gained nothing

At 20 per cent, India has so far had the world’s lowest bad-loan recovery rate. As a result, in comparison to a year for London and 0.8 years for Singapore, the average time taken to resolve a soured account was 4.3 years for India. The lender recovery rate was, on average, 26.4 cents to the dollar, the poorest among emerging economies (World Bank).

However, in 2016, the Insolvency and Bankruptcy Code (IBC) was introduced in order to improve the prospects of loan recovery. The code makes a clear distinction between bankruptcy and insolvency while simultaneously enforcing a modern bankruptcy framework that