The Insolvency and Bankruptcy Code, 2016 is aimed at maximization of value of assets and expansion of the credit market in India. It envisages and regulates the process of insolvency and bankruptcy of all persons including corporates, partnerships, LLP’s and individuals. The enactment of the Code lays down a time bound resolution process which is undertaken by Insolvency Professionals. Thus the Code has opened up new possibilities for time bound resolution of stressed assets.
Insolvency Professional form a crucial pillar upon which rests the effective, timely functioning of the entire mechanism of the insolvency resolution process. An Insolvency Professional may hold the role of Interim Resolution Professional/ Resolution Professional/ Bankruptcy Trustee/ Liquidator. He has to carefully plan and manage his actions and promptly communicate with all stakeholders involved for timely discharge of his duties under different processes.
Further the recent Banking Regulation (Amendment) Ordinance, 2017 enables the Central Government to authorize the Reserve Bank of India to direct banking companies to initiate insolvency resolution process in respect of a default under the provisions of the Insolvency and Bankruptcy Code, 2016. This action of the Government will have an impact on resolution of stressed assets as the RBI is empowered to intervene in specific cases.
Thus the role of Insolvency Professionals becomes even more significant in tackling the issue of resolution of Non-Performing Assets (NPA) which is affecting the economy.