Fmr Finance Secretary–Insolvency & Bankruptcy Code Virtually Gone, Credit Quality to Hit Rock-Bottom
The Wire
2021-06-03
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In a conversation with Mitali Mukherjee, Former Finance Secretary SC Garg said the recent announcement by RBI to permit one-time restructuring of corporate loans under a committee headed by veteran banker KV Kamath, rang a virtual death knell for the IBC ( The Insolvency and Bankruptcy Code, 2016 ). He also said allowing stressed companies to restructure loans without any downgrade in asset classification could set our banks up for a bad-loan crisis later on.
Wire’s founding editor MK Venu said handing over the discretion to decide on a company that was “worthy” of going in for restructuring or not, could open decisions up to high subjectivity. The decision to remove key sectors like power from the IBC had been a retrograde step in the first place, and with this one- time restructuring, other sectors could be in the same position i.e. continue to bleed profusely financially, without any change in ratings.
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Wire’s founding editor MK Venu said handing over the discretion to decide on a company that was “worthy” of going in for restructuring or not, could open decisions up to high subjectivity. The decision to remove key sectors like power from the IBC had been a retrograde step in the first place, and with this one- time restructuring, other sectors could be in the same position i.e. continue to bleed profusely financially, without any change in ratings.
Like our work? Click here to support The Wire: https://thewire.in/support
The founding premise of The Wire is this: if good journalism is to survive and thrive, it can only do so by being both editorially and financially independent. This means relying principally on contributions from readers and concerned citizens who have no interest other than to sustain a space for quality journalism. As a publication, The Wire will be firmly committed to the public interest and democratic values.
We publish in four different languages!
For English, visit www.thewire.in
for Hindi: http://thewirehindi.com/
for Urdu: http://thewireurdu.com
for Marathi: https://marathi.thewire.in
If you are a young writer or a creator, you can submit articles, essays, photos, poetry – anything that’s straight out of your imagination – to LiveWire, The Wire’s portal for the young, by the young. https://livewire.thewire.in/
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