Union Finance and Corporate Affairs Minister Nirmala Sitharaman said on Saturday that the insolvency law "cannot lose its sheen". The Insolvency and Bankruptcy Board of India (IBBI) and the Insolvency and Bankruptcy Code (IBC) have achieved more than six years of work, said Sitharaman, speaking at the sixth annual day of the institution.

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"It is now time to put in place systems to understand how to handle new situations in front of us," the Union Minister said.

IBBI is a key institution in the implementation of the Insolvency and Bankruptcy Code (IBC), which provides for a market-linked and time-bound resolution of distressed firms. The code came into force in 2016.

"The world now has different yardsticks for companies, global value chains and there are global disruptions," the Finance Minister said.

"We can't treat companies facing distress with delay... We cannot have stress signals go unnoticed," she said. "I am happy to hear that now we are getting a provision where institutions of resolution professionals are also coming up. It will help in cases where one or two resolution professionals are unable to find a best solution, at times more minds need to be applied."

The Finance Minister said more work is likely to come in from the Competition Commission of India (CCI). She also said that an era of mergers and acquisitions could be in anvil.

National Company Law Tribunal (NCLT) President Chief Justice (Retd) Ramalingam Sudhakar and CCI Chairperson Ashok Kumar Gupta were in attendance at the event.

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Talking about inflation, she said it is at manageable levels. The Union Minister also said she was happy that the RBI announcements on September 30 sent a positive message to the market.

On Friday, RBI Governor Shaktikanta Das announced a 50-basis-point hike in the repo rate — or the key interest rate at which the RBI lends money to commercial banks — as widely expected, and hinted at more increases in the coming months. Indian equity benchmarks surged almost two percent cheering the absence of surprises in the RBI announcements, snapping a seven-day-long losing streak.

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As many as 1,934 corporate debtors have been rescued through the IBC, as of June 2022. These include 517 through resolution plans, 774 through appeal, review or settlement, and 643 through withdrawal. In value terms, around 69 percent of distressed assets that entered the process under the IBC have been resolved, according to the IBBI website.

With inputs from PTI

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