Even as the latest amendment in the Insolvency and Bankruptcy Code (IBC) was notified, M S Sahoo, chairman of Insolvency and Bankruptcy Board of India (IBBI) on Friday said that capacity building of stakeholders was needed to be improved.

Speaking on the sideline of his keynote address at Indian Institute of Management, Ahmedabad (IIM-A), Sahoo said, "There is challenge in the form of capacity building. All stakeholders including committee of creditors, resolution professionals, national company law tribunals and the insolvency and bankruptcy board itself need to improve our capacity."

Reiterating that while there was no shortage of resolution professionals and registered valuers, at 2600 and 2000, respectively, Sahoo said that with expansion of the insolvency process, further capacity building would be required. From merely corporate debtors now, the IBC is being extended in the near future to commence resolution process of personal guarantors to corporate debtors, followed by single proprietorship and partnership defaulters.

"However, this will be done in a phased manner," Sahoo stated. In his speech, the IBBI chairperson maintained that the success of the insolvency process was evident in bringing a behavioural change among defaulters.

"Defaulters paradise is lost... With the insolvency process bringing a big behavioural change, many settlements are now happening outside of the IBC," said Sahoo in his keynote address. Sahoo was addressing the inaugural session of the two days research conference on Financial Distress, Bankruptcy, and Corporate Finance (FDBCF 2019) being held at IIM-A. Enumerating the success of the process, Sahoo also said that recovery rates for creditors have been over 40 per cent, while realisation as compared to liquidation value of distressed assets has been around 190 per cent so far.

Speaking at the conference, Krishnamurthy Subramanian, chief economic advisor, Government of India, said that the country needed to grow by 8 per cent in order to achieve the targeted $5 trillion economy.

"Economic survey talks about importance of investments for economic growth. We have been growing at 6.5-7 per cent in terms of GDP. Difference in GDP because we moved from volume indicator to value indicator and a much larger population for sampling," he said, while adding that investment impetus was required to enhance productivity by creating jobs. However, the investment had come through exports rather than with large domestic consumption since the economy would need savings.

The conference is being supported by the newly-established Misra Centre for Financial Markets and Economy at IIM-A. Errol D'Souza, director of IIM-A, said that the centre had been created for applied research on the economic context "affecting investments such as central banking and fiscal programs, financial intermediation to SMEs, financial inclusion, financial instruments and their market behaviour".