1. INTRODUCTION
It's no secret that the Indian banking industry has a rather
large number of loans outstanding that have simply gone wrong. With
non-performing loans estimated at just over INR 6.3
trillion1 market. In this context, the new Insolvency
and Bankruptcy Code (the "Code") passed
by Parliament earlier this year, promises to address the structural
problems hampering the efficient recycling of capital and rebalance
the rights of creditors, giving them much needed recourse to take
timely and effective action against defaulting borrowers.
It is hoped that the Code will become effective by the end of
this year2 and in order to achieve this, institutions
need to be set up and regulations are required to be put in place.
At the beginning of August, India's central government gave
notice for the appointment of a chairman and board for the new
Bankruptcy Board constituted by the Code, essentially kick-starting
the process for the future operation of the Code.
