IBC process: UBI seeks monitoring mechanism for resolution professionals

In view of delays in resolution of stressed assets under the Insolvency and Banking Code (IBC), Kolkata-based United Bank of India is planning to write to the Insolvency and Bankruptcy Board of India (IBBI) to a have monitoring mechanism for the resolution professionals (RP).
 
“In a large number of cases, due to inaction by RPs, there have been long delays in the resolution process. We are planning to write to the IBBI that there should be some mechanism to monitor the performance of RPs. We will make a strong representation to the IBBI in this matter,” said Ashok Kumar Pradhan, managing director and chief executive officer of United Bank of India.
 
According to data from the IBBI, as on December 20 for about 1,374 cases, a public announcement for the Corporate Insolvency Resolution Process (CIRP) has been done. Of this, only about 75 accounts have seen resolution.
 
“Banks expected that the IBC will be highly efficient and quick in resolving the issue of stressed assets. The system is still adjusting to the new mechanism. At present, there is some concern regarding the role of RPs. Since all professional bodies in general are under one or more kinds of supervisory bodies, it will be a good proposal to have some regulatory body for the RPs also,” said Mrutyunjay Mahapatra, MD and CEO, Syndicate Bank.

 
The data available with the IBBI upto September 30, of the 1,198 admitted for CIRP, about 238 cases have breached the extended 270-day deadline within which resolutions were to be completed.
 
The process from admission of a company under NCLT upto the resolution requires time-bound and speedy action by RPs. Once a company has been admitted under NCLT, the CIRP has to be completed within 180 days of the admission. An interim resolution professional (IRP) is appointed within 14 days of the acceptance of the application. The IRP is required to form a committee of creditors (CoC), within 30 days of NCLT order.