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India Lags in Resolving Insolvencies
May 29, 2018


Last year, India jumped up 30 places and into the top 100 on the World Bank's 'ease of doing business' index.

However, when it comes to resolving insolvency, India's rank is still low at 103, much below our neighbouring countries.

On both factors (i.e. recovery rate and the time to resolve a bankruptcy), India is slower than even its poorer neighbours.

However, going forward, the IBC framework will change India's position as it is a time-bound process.

Cases once admitted are to be resolved within 270 days; if not, companies go into liquidation.

We already had a taste of success with the successful conclusion of the Bhushan steel case.

Enthused by this success, the finance ministry expects banks to write back more than Rs 1 trillion after the resolution of all 12 big NPA cases that have been referred for insolvency proceedings by the RBI.

We believe, this can be a big boon for the banking sector and the Indian economy. This will not only help banks recover bad loans to an extent but also help bring back credit growth.

We recently recommended a company to our Smart Money Secrets subscribers which we expect to benefit immensely from the Bhushan Steel's recovery.

If you do not have access to Smart Money Secrets, you can sign up here...

Data Source: World Bank

This Chart Of The Day was published in The 5 Minute WrapUp - The Tata Steel-Bhushan Steel Deal Could Result in 59% Gains from This Stock

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