Backlog of 60,000 Cases Damps Hope for India Bankruptcy Overhaul
- The sooner the law is implemented, the better: Western Asset
- India needs judicial reforms, insolvency professionals: Fitch
This article is for subscribers only.
India has a brand new law at its disposal to help clean up $131 billion of impaired debt and avert a crisis at its banks. Implementation challenges are so daunting that the full benefits may be years away.
The law passed by parliament this month calls for the creation of a Bankruptcy Board, which will regulate a new class of insolvency professionals. It also requires adjudication by two agencies: a National Company Law Tribunal, which has yet to be set up, and the Debt Recovery Tribunals, which had 62,000 cases pending as of December 2014 and a disposal rate of about 10,000 cases per year, according to PRS Legislative Research.