Injeti Srinivas, Secretary, Ministry of Corporate Affairs said recently that majority of corporate insolvency cases have been settled.

“The speed at which the cases have been disposed by the NCLT has been commendable. But the IBC should be invoked only as a last resort.” He added.

Elaborating further on the subject, he informed that a majority of corporate insolvency, which has led to burgeoning of NPAs, has been settled and the accent is now on resolving personal insolvency.

In this context, an analysis of the outstanding non-food credit shows that the industry tops the list followed by services sector, housing finance and vehicle loans.

On dealing with personal insolvency, Srinivas elucidated on two routes namely the insolvency resolution process followed by bankruptcy and secondly making a fresh start. Stressing on the need for a planned approach, a fresh start or a waiver of a loan should be considered for debtors based on a certain criteria such as income levels, assets, possession of dwelling unit etc.

Fresh start or loan waiver is especially recommended as a large number of debtors have small outstanding loans. The UK example for personal insolvency should be emulated, a counsellor should be available to address the concerns and the process should be made online.

On cross - border insolvency, Mr Srinivas stated that this is a new and complex area which relates to resolving insolvency of companies which have a global footprint and have assets spread across the globe.

Elaborating on the different processes available to enforce the judicial order on insolvency, he said that the UNCITRAL model law on cross –border insolvency gives a possible framework for addressing the issue of addressing cross border insolvency and is slated to be approved by the Parliament shortly.

But this is still work in progress and more is required to tie up the loose ends.