Monday, 26 March 2018, Mumbai: CFA Society India, an association of local investment professionals, in collaboration with AZB & Partners co-hosted a panel discussion on ‘Insolvency and Bankruptcy Code: Issues, Challenges and Way Forward’. The discussion was intended to suggest methods to ensure better and timely implementation and execution of the Insolvency and Bankruptcy Code (IBC / Code) and the Revised Framework for Stressed Assets under the 12 February 2018 circular of the Reserve Bank of India.
Moderated by Saurav Mishra, CFA, Director, CFA Society India, the panel included – Sunil Shrivastava, Deputy Managing Director, State Bank of India; Kaushik Chatterjee, Executive Director and Chief Financial Officer, Tata Steel Limited; Zia Mody, Founder and Managing Partner, AZB & Partners; Abizer Diwanji, Partner and National Leader, Financial Services and restructuring, EY; and Kalpesh Kikani, Managing Director and Senior Partner, AION Capital.
The panel emphasised that the Code is a revolutionary step taken by the Government of India to address the non-performing asset (NPA) issue faced by the country. Since the Code is evolving, it will require some time to settle and for all the stakeholders involved in the corporate insolvency resolution process to understand and get used to the process envisaged under the Code.
“We are going through a fascinating journey – the jurisprudence that emerges in the coming year will determine how the bankruptcy code will function in practice,” said a panelist.
The government, the Securities and Exchange Board of India (SEBI) and the RBI are collectively working to ensure the success of the Code. This is evident from the changes made to the Companies Act, 2013, SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2017, and the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2017.
According to one of the panelists, “Banks finally have a mechanism that focuses both on the complexity of the resolution process as well as attempting to produce resolution within an acceptable time frame. IBC is an ambitious reform, and will transform banks’ ability to ensure credit discipline.”
The panelists acknowledged that the Code is a welcome step and the success of the Revised Framework for Stressed Assets can be assessed only by evaluating the practical implications of these laws over time.
About CFA Society India
CFA Society India was established in April 2005 as an association of local investment professionals consisting of portfolio managers, security analysts, investment advisors and other financial professionals. As one of the 151 CFA Institute member societies worldwide, CFA Society India connects local members to a global network of investment professionals. For more information, visit www.cfasociety.org/india