The Centre is in discussions with banks to work out a regulatory mechanism to transfer assets attached by various investigative agencies to a buyer or successful resolution applicant under the Insolvency & Bankruptcy Code (IBC).
At present, if investigating agencies such as the Enforcement Directorate have attached assets of a fraudulent bankrupt borrower, lenders are unable to include the asset in the corporate insolvency resolution process under the IBC.
The Indian government is discussing with lenders a regulatory mechanism to transfer assets attached by investigative agencies to a buyer or successful resolution applicant under the Insolvency & Bankruptcy Code. Presently, such assets of a fraudulent bankrupt borrower removed by investigating agencies, such as the Enforcement Directorate, are difficult for lenders to include in the corporate insolvency resolution process under the IBC. Discussions are in the early stages, though experts suggest prompt settlement of the case could result in better outcomes under the IBC in both timing and valuations.
