The newly enacted Insolvency and Bankruptcy Code is going to make debts funds easier for firms according to the newly appointed Chairman of the Insolvency and Bankruptcy Board – MS Sahoo. Speaking at a seminar in Mumbai, Mr Sahoo said that the new law will make the debt market as vibrant as the equity market.
India’s financial system has a laggard in the form of an underdeveloped bond market. Lack of procedures in insolvency causes funds remain unrecovered in case of failure of companies. The Bankruptcy Code tries to overcome this difficulty. Exactly, the Code brings guidelines for early and timely settlement of failing companies without allowing the finances of the lenders affected.
Mr Sahoo observed that time-bound resolution (solving debts of failed companies) to insolvency will result in lower default, better recovery and make finance available at a lower cost for riskier projects besides giving better quality of services.
The Chairman observed that the follow up measures after the enactment of the Code is swifter.