{"id":39376,"date":"2022-05-01T15:36:59","date_gmt":"2022-05-01T10:06:59","guid":{"rendered":"https:\/\/tradebrains.in\/features\/biz-ibc-resolution\/"},"modified":"2022-05-01T15:36:59","modified_gmt":"2022-05-01T10:06:59","slug":"biz-ibc-resolution","status":"publish","type":"post","link":"https:\/\/tradebrains.in\/features\/biz-ibc-resolution\/","title":{"rendered":"Resolution primary objective of IBC; but need to be mindful of recovery too: SBI MD J Swaminathan"},"content":{"rendered":"<div class=\"trade-content_2\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-3004812591\"><p><a href=\"https:\/\/tradebrains.in\/get\/telegram\/\"><img decoding=\"async\" class=\"alignnone wp-image-101992\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2023\/01\/telegram-channel-300x119.png\" alt=\"\" width=\"148\" height=\"59\" \/><\/a> <a href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMN3Epgswxc--Aw?hl=en-IN&amp;gl=IN&amp;ceid=IN%3Aen\"><img decoding=\"async\" class=\"alignnone wp-image-123430\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png\" alt=\"follow-on-google-news\" width=\"222\" height=\"61\" srcset=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png 300w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-150x41.png 150w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news.png 468w\" sizes=\"(max-width: 222px) 100vw, 222px\" \/><\/a><\/p>\n<\/div><p> Mumbai, May 1 (PTI) The primary objective of the Insolvency and Bankruptcy Code (IBC) process is resolution of a distressed firm, but the recovery percentage also needs to be kept in mind, SBI Managing Director J Swaminathan said on Sunday.<\/p><div class=\"trade-content_7\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-2854344556\"><!-- Composite Start --> \r\n <div id=\"M923760ScriptRootC1549812\"> \r\n <\/div> \r\n <script src=\"https:\/\/jsc.mgid.com\/t\/r\/tradebrains.in.1549812.js\" async> \r\n <\/script> \r\n <!-- Composite End --><\/div>\n<p> Financial and operational creditors owe money to companies facing insolvency proceedings and so recovery has to be an important factor while achieving resolution of stressed assets, he noted.<\/p>\n<p> &#8220;All of us clearly understand, as the lenders&#8217; forum, that resolution is the primary objective of legislation like IBC. So, I don&#8217;t think that there is any moving away from that particular point.<\/p>\n<p> &#8220;We will stay the course on those lines, despite the criticism that either we are being pushed more towards recovery, or we are just being mindful of a resolution, disregarding the recovery percentage,&#8221; Swaminathan said at an event organised by Indian Institute of Management, Ahmedabad.<\/p><div class=\"trade-content_5\" id=\"trade-387604535\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_2_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"7925020301\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div>\n<p> He, however, added that while attempting a resolution, &#8220;we cannot lose sight of recovery&#8221;.<\/p>\n<p> Swaminathan said if the narrative starts building towards haircuts, then it is likely that the lenders may not take any decision, which will lead to paralysis, and then the stressed units will go into liquidation.<\/p>\n<p> &#8220;In such a case, the entire objective of legislation like IBC towards resolving corporate stress in an orderly manner will be defeated,&#8221; he pointed out.<\/p>\n<p> Haircut taken by lenders as part of resolution plans approved under IBC refers to the shortfall in recovery to creditors as compared to their claims submitted in the insolvency process of a stressed borrower.<\/p>\n<p> Speaking on providing interim financing to borrowers facing insolvency proceedings, Swaminathan said State Bank of India (SBI) has become the first bank to put a board approved interim financing policy in place.<\/p>\n<p> &#8220;We have now put our metrics in place. The board has approved a policy that if a particular proposal satisfies certain metrics, the bank is willing to take that additional risk,&#8221; he said.<\/p><div class=\"trade-content-10\" id=\"trade-2957101187\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_3_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"2969612066\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div>\n<p> He expects other lenders also to follow suit.<\/p>\n<p> There is also a need for looking at other players providing distressed asset or private debt funding to give interim finance to borrowers, he said.<\/p>\n<p> &#8220;Rather than looking at the same set of lenders who have got their money already struck, are there any players who can come in for distressed asset funding, or litigation financing or priority debt funding, and may have a much higher risk appetite than a usual commercial bank? \t &#8220;Maybe if we can develop that, it can be an alternative means of financing,&#8221; he added. PTI HV  ABM ABM<\/p>\n<div class=\"trade-after-content\" id=\"trade-815861827\"><div id=\"taboola-below-article-thumbnails\"><\/div>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({\r\n    mode: 'alternating-thumbnails-a',\r\n    container: 'taboola-below-article-thumbnails',\r\n    placement: 'Below Article Thumbnails',\r\n    target_type: 'mix'\r\n  });\r\n<\/script>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({flush: true});\r\n<\/script><\/div>","protected":false},"excerpt":{"rendered":"<p>Mumbai, May 1 (PTI) The primary objective of the Insolvency and Bankruptcy Code (IBC) process is resolution of a distressed firm, but the recovery percentage also needs to be kept in mind, SBI Managing Director J Swaminathan said on Sunday. Financial and operational creditors owe money to companies facing insolvency proceedings and so recovery has [&hellip;]<\/p>\n","protected":false},"author":13,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[31],"tags":[],"class_list":["post-39376","post","type-post","status-publish","format-standard","hentry","category-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.5 (Yoast SEO v25.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Resolution primary objective of IBC; but need to be mindful of recovery too: SBI MD J Swaminathan - Trade Brains Features<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/tradebrains.in\/features\/biz-ibc-resolution\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Resolution primary objective of IBC; but need to be mindful of recovery too: SBI MD J Swaminathan\" \/>\n<meta property=\"og:description\" content=\"Mumbai, May 1 (PTI) The primary objective of the Insolvency and Bankruptcy Code (IBC) process is resolution of a distressed firm, but the recovery percentage also needs to be kept in mind, SBI Managing Director J Swaminathan said on Sunday. 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