India News | Recoveries Under IBC Far Better Than SARFAESI, DRT: Das

Mumbai, Aug 6 (PTI) Reserve Bank Governor Shaktikanta Das on Friday said recoveries in stressed accounts undergoing resolution process under the Insolvency and Bankruptcy Code (IBC) have been much better for lenders compared to other redressal mechanisms for bad loans.

He said between 2014-15 and 2019-2020, total recoveries, after haircut, under Lok Adalat regime was 5 per cent, Debt Recovery Tribunal (DRT) 6 per cent and Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) at 20 per cent.

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The recoveries for lenders under IBC stood at 40 per cent during the period, Das said, adding that till the onset of the pandemic, the recoveries were close to 45 per cent.

"So far as the recoveries are concerned under IBC, it is far better than SARFAESI and DRT," the governor told reporters during the post monetary policy press conference.

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His response came to a query on whether huge haircuts undertaken by lenders in certain large IBC cases is a cause of concern for the regulator.

Das, however, said there is a need to reduce the time taken in the implementation of IBC resolution.

"The government has also undertaken some further legislative action to streamline the process and rationalise the system," he added.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)