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'IBC raised confidence of all investors in economy'
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SME Times News Bureau | 25 Oct, 2020
The Insolvency and Bankruptcy Code (IBC) has not only strengthened the
banking system by helping them resolve outstanding debt piled over years
but has also come as a big booster of confidence of national and
foreign investors in the Indian economy, a senior SBI official said on
Saturday.
In his address as the Guest of Honour in the inaugural
session of the international conference (online) on "Insolvency
Resolution Paradigm: Global Headwinds and Responses", State Bank of
India's Managing Director, Commercial Clients Groups, Arijit Basu, said
that earlier banks only had "loan structuring" option which used to take
five to six years.
"Now, the IBC has provided equal opportunity
to corporate sector and banks. It has changed the relationship between
borrowers and creditors and provided a mechanism of insolvency.
"Unsustainable
debt is a symptom of fundamental issues in the 'business model' of the
concerned company. In case if you don't have a viable resolution plan,
we (banks) have a viable resolution plan under IBC," he said.
However,
Basu expressed satisfaction that the big corporate houses in India have
efficiently managed their cash flow during Covid-19.
The event was organised by the Indian Institute of Insolvency Professionals of ICAI (IIIPI).
In
his address, Institute of Chartered Accountants of India (ICAI)
President Atul Kumar Gupta highlighted the role of CAs being played in
IBC ecosystem as insolvency professionals (IPs).
"About 62 per
cent of insolvency professionals are CAs. Besides, IBC has opened
several new opportunities for CAs in the form of valuer, liquidator,
technical experts in the NCLT, the NCLAT, high courts, and also the
Supreme Court, and also various kinds of advisory services," he said.
Gupta
also appreciated the initiatives of the Central government in helping
businesses to wade through the economic crisis caused by the Covid-19
pandemic.
In the session titled "Perspective on Global Insolvency
Regime", Joint Secretary, Corporate Affairs, Gyaneshwar Kumar Singh
said: "IBC has not only served corporates but livelihoods also. As per
estimates, the total value of insolvency cases amount to about Rs 5.63
lakh crore. If it had undergone through liquidation, only about 7 per
cent of the money would have been recovered. This would have adversely
impacted the Indian economy."
"With IBC in place, there will be no sick companies and sick banks in the future".
In
the same session, Paul Bannister, Head (Policy), Insolvency Service,
UK, appreciated the response of India in handling the economic crisis
caused by Covid-19.
"These are very difficult times. We already
have a world-class insolvency regime but we are developing further
against the context of crisis and changing international context
including Covid and UK's exit from the European Union," he said.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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84.35
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82.60 |
UK Pound
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106.35
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102.90 |
Euro
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92.50
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89.35 |
Japanese
Yen |
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53.40 |
As on 12 Oct, 2024 |
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