Today everybody is clueless about the implications of Bankruptcy Code in terms of recovery rates, time to resolve and seek settlements. However, at this point one can only take a minimal level of comfort by drawing a parallel with other economies and see on a relative basis how things paned out in those economies post the implementation of the reform.
Insolvency and Bankruptcy Code, 2016: The IBC aims to resolve insolvencies in India within definite timelines and by enhancing the credit enforcement structure. The IBC is a key long-term initiative that structurally strengthens the identification and resolution of insolvencies in India.
Internationally, bankruptcy recovery rates have improved significantly after the implementation of bankruptcy reforms, as tabulated below:
Time will tell how the recovery rates pan out after 5 years of implementation in India!
