homevideos Newseconomy News

Government defends Insolvency and Bankruptcy Code, blames banks for low recoveries

videos | Jun 10, 2022 5:54 PM IST

Government defends Insolvency and Bankruptcy Code, blames banks for low recoveries

Mini

After facing criticism over the shrinking recoveries under Insolvency and Bankruptcy Code (IBC), the government has defended the law. Government sources told CNBC-TV18 that recoveries are slower because banks are moving NCLT at a slow pace and are therefore compelled to take steep haircuts.

After facing criticism over the shrinking recoveries under Insolvency and Bankruptcy Code (IBC), the government has defended the law.

Recommended Articles

View All

Government sources told CNBC-TV18 that recoveries are slower because banks are moving NCLT at a slow pace and are therefore compelled to take steep haircuts.
Under the banking regulations it is required that after 330 days of default the banks should move towards the NCLT under the IBC regime. However that has not been the case and data suggests that banks are only moving NCLT after 700 days. So this long wait, the government argues depresses the value.
Also the banks continue to levy penal interest as well, so there is principal, there is interest and then there is interest on interest which inflates the total claim presented before NCLT.
Sources also said that the government is working on streamlining the process and will be floating a consultation paper.
Watch video for more.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!

Top Budget Opinions

    Most Read

    Market Movers

    View All
    Top GainersTop Losers
    CurrencyCommodities
    CompanyPriceChng%Chng