Galvanised by criticism over mounting bad loans and high default rates by large companies, India brought the Insolvency and Bankruptcy Code (IBC) in 2016, a modern and contemporary bankruptcy law.
The Code, which has undergone several amendments, creates time-bound processes for insolvency resolution of companies and individuals.
These processes are completed within 180 days, extendable up to 270 days. If insolvency cannot be resolved, the assets of the borrowers are allowed to be sold to repay creditors.
The resolution processes are conducted by licensed insolvency professionals (IPs). These IPs are members of insolvency professional agencies (IPAs), who also furnish performance bonds equal to the assets of a company under insolvency resolution.
Source: Moneycontrol, January 17,2019