MUMBAI (CU)_Over the past year, the COVID-19 pandemic disrupted the lives and livelihoods of millions of people, with rising unemployment rates and falling working hours. As a result, now many economies are struggling to deal with piling bad debts as they fight to recover from the global health crisis and stabilise their financial systems. This has been no different in Asia’s third-largest economy, India, where investors claim that many fundamental problems in the insolvency laws that were introduced in 2016 need to be addressed first.
As creditors’ recovery rates continue to decline, and delays in closing cases in insolvency courts increase, investors’ confidence in the country’s bankruptcy reforms has been shaken. According to data compiled by the Insolvency and Bankruptcy Board of India, less than 10 per cent of the companies that are admitted in the insolvency courts is getting resolved, and of these companies, only 39 per cent of dues are recovered by financiers, as of March this year. A year earlier, this figure stood at 46 per cent.
Accordingly, there is growing hope…
