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According to the RBI data & report, Insolvency and Bankruptcy Code (IBC) and amendments in the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests (SARFAESI) Act has resulted in the much better recovery of stressed assets for the banks during the fiscal year 2018.
As per the data, the banks recovered bad loans worth Rs 40,400 crores in the fiscal ended March 2018, as compared to the recovery of Rs 38,500 crores during the fiscal year 2017. The report stated that the Insolvency and Bankruptcy Code (IBC), SARFAESI Act, debt recovery tribunals (DRTs) and Lok Adalats were the significant channels which enabled the banks to recover their bad loans.
The Reserve Bank in its annual report on Trends and Progress of Banking in 2017-18 claimed that Rs 4,900 crores worth of bad loans were recovered by banks through the IBC, whereas SARFAESI helped the bank to collect Rs 26,500 crores worth of bad loans during FY17.
The report, which was released the week earlier, informed: “The average recovery through IBC is greater than other mechanisms.” The RBI also said, “Strengthening the infrastructure of the insolvency resolution process, including the proposed increase in the number of benches of the National Company Law Tribunals (NCLTs), should help reduce the overall time currently being taken for resolution under the IBC.”
