A majority of corporate insolvency cases have been resolved and the focus is now on resolving personal insolvency, Corporate Affairs Secretary Injeti Srinivas said on Monday.
‘Commendable speed’
“The speed at which the cases have been disposed [of] by the NCLT [National Company Law Tribunal] has been commendable,” Mr. Srinivas said, speaking at a national conference on the Insolvency and Bankruptcy Code organised by CII and the British High Commission.
“But the IBC should be invoked only as a last resort,” he added.
“A majority of corporate insolvency, which has led to burgeoning of [non-performing assets] NPAs, has been settled and the attempt is now on resolving personal insolvency,” he said.
On dealing with personal insolvency, Mr. Srinivas said that there were two routes that could be taken. The first is to go through the insolvency resolution process, followed by bankruptcy, and the second is to make a fresh start.
“A fresh start or a waiver of a loan should be considered for debtors based on certain criteria such as income levels, assets, possession of dwelling units, etc.,” Mr. Srinivas said.
“Fresh start or loan waiver is especially recommended when a large number of debtors have small outstanding loans.”
