Strengthening the IBC : Quick action needed

Strengthening the IBC: SC decision to send Jaypee matter back to NCLT is welcome...



Act quickly

This refers to your editorial “Strengthening the IBC” (Business Standard, August 13). That Supreme Court is, of late, exposing the game played by the rich and the powerful to circumvent regulatory oversight, using legal loopholes and mustering the support of celebrity lawyers to delay legal processes, is a silver lining in the otherwise gloomy situation in the country’s financial sector.
The government has acted quickly in passing necessary legislation for handling the NPA-mess of Indian banks which had reached ugly levels. Insolvency and Bankruptcy Code (IBC) and the supporting architecture including NCLT after facing initial criticism, are stabilizing. Having said that, in an election year, GOI is going to get pressurized to go slow on the implementation of several measures affecting the catchment area for political funding. It will be tempting to succumb to pressures in such a scenario. But the choice is between doing the right things in time and popular measures to help willful defaulters escape punishment.
If preserving the gains of measures taken so far is the objective, to ensure a stable economic growth during the coming decade, the present central government need to work out a consensus among major political parties not to make election promises that will adversely affect national interests.
The institutional system that is responsible to implement Centre’s commitments also needs immediate attention and support. Illustratively, vacancies at the top level in statutory bodies and PSUs including PSBs should be filled quickly and each appointment should have a minimum tenure of three years. It would be ideal to get legislative backing for such an approach.

M G Warrier, Mumbai

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