NEW DELHI: The parliamentary standing committee on Finance has slammed the Insolvency and Bankruptcy Code (IBC) for very low recovery rates, and expresses need for a benchmark for the quantum of haircuts.
The committee in its report has said: “Low recovery rates with haircuts as high as 95%, and delay in resolution process with 71% of the cases pending for more than 180 days clearly points towards a deviation from the original objectives of the Code intended by parliament.”
The committee, therefore, says there is a need to have a relook at the design and implementation of the code in the light of its original aim and objective.
The committee has also sought to have a benchmark for the quantum of the haircuts comparable to global standards. The committee also said that there is a need for a professional code of conduct for the committee of creditors (CoC), whose Commercial Wisdom is considered supreme.