Haircuts and settlements

Gaming the system leads to losses to lenders

Topics
Insolvency and Bankruptcy Code | NCLT bankruptcy case | loan recovery

Business Standard Editorial Comment  |  New Delhi 

India’s bankruptcy process under the Insolvency and Bankruptcy Code (IBC) is relatively new, and should be seen as a work in progress. Concerns that have recently been raised about the size of the haircuts that lenders have had to take should be seen in that light.

Overall, haircuts have been in the 80 per cent range — in other words, banks have lost four-fifths of the money they have lent companies that have entered the IBC process. Even the National Company Law Tribunal recently expressed surprise that Vedanta’s Anil Agarwal was “paying almost nothing” to ...

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First Published: Mon, July 05 2021. 22:22 IST
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