Unlocking Insolvency: Boosting Indian Business Productivity

IBBI chief Ravi Mital highlighted the need for Indian companies to better utilize the Insolvency and Bankruptcy Code (IBC) by opting for voluntary resolution processes. While most insolvency cases are creditor-initiated, voluntary applications can enhance productivity and reduce value destruction, Mital emphasized during a conference in the national capital.


Devdiscourse News Desk | New Delhi | Updated: 30-01-2025 18:39 IST | Created: 30-01-2025 18:39 IST
Unlocking Insolvency: Boosting Indian Business Productivity
Insolvency
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  • India

The chief of the Insolvency and Bankruptcy Board of India (IBBI), Ravi Mital, emphasized the need for Indian companies to learn how to leverage the nation's insolvency law more effectively. His call to action came during a conference organized by industry players, highlighting a significant area of improvement in the current application of the Insolvency and Bankruptcy Code (IBC).

Since its inception in 2016, the IBC has facilitated a market-linked and timely resolution of stressed assets, with creditors recovering approximately Rs 3.6 lakh crore over the past eight years. However, Mital pointed out a discrepancy: while creditors frequently initiate insolvency resolution processes, the incidence of voluntary applications remains low.

Addressing industry leaders in Delhi, Mital stressed the transformative potential of voluntary involvement in insolvency processes. Comparing the situation to practices in developed countries like the United States, he suggested that enhancing understanding of Section 10 of the IBC could empower companies to improve productivity while mitigating value destruction.

(With inputs from agencies.)

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