Changes to Insolvency Code: Banks likely to face legal tangle

A lot of hope was built at banks around benefits from prompt resolution under the IBC from the fourth quarter of FY18

With legal issues thrown up by the recent changes to the Insolvency and Bankruptcy Code (IBC), any benefits to banks from resolution of the stressed assets in question might now get postponed to the next financial year. Banks would also be forced to expand their legal teams. 

The head of legal operations at a public sector bank said it has been only a year into dealing of cases under this new law. The jurisprudence (court and tribunal verdicts) on IBC is evolving; there is little to fall back on for guidance. The scene is cloudy.

A lot of hope was