Last year, the Indian government suspended the initiation of new
insolvency proceedings under the Insolvency and Bankruptcy Code,
2016 (IBC) in relation to the defaults occurring
on or after 25 March 2020 so as to protect the Indian companies in
view of the economic stress caused by the Covid-19 pandemic. With
the suspension of new insolvency proceedings in relation to the
Covid-19 defaults, the option to resolve the Covid related defaults
under the IBC framework is no longer available to the lenders.
While (a) the prudential framework issued by the Reserve Bank of
India (RBI) on 7 June 2019, (b) the scheme of
arrangement under the provisions of Companies Act, 2013
(CA, 2013) and (c) one-time debt restructuring
scheme issued by the RBI, are some of the alternatives available to
lenders for resolution of stressed assets, however, each of these
alternatives have their own limitations. The Indian government,
therefore, constituted a sub-committee
(Sub-committee) of
