The time has come to establish a process for stressed assets before they hit the insolvency stage, said market expert Deven Choksey. There are plenty of stressed asset funds in the global markets, who are always interested in buying stressed assets before it goes into the IBC or NCLT route, he said.
Should this kind of mechanism be installed, the lending sector—banks and NBFCs—would find themselves better off and could offload some of the stressed assets a bit ahead of time, said Choksi in an interview with CNBC-TV18.
"The stage has come you should have a stage before IBC, which means the stressed assets that the banks are carrying if they are allowed to be absorbed by stressed asset funds, probably the stage of NCLT could be avoided and as a result of which complete stress on the balance sheets of the lenders could be taken care of,” he said.
“In the process, liquidity would be created with lenders and revival of the assets would take place faster and continuity of enterprise would be ensured,” he said.