IBBI Chairman M S Sahoo has said the board is ready to handle insolvency and bankruptcy of defaulting borrowers for resolution of bad loans.
His comment follow an Ordinance empowering the Reserve Bank of India to direct lenders to resolve mounting bad loans.
Once banks are directed by RBI to resolve non-performing assets (NPAs) under the IBC, they can approach National Company Law Tribunal (NCLT) and the IBBI.
"My system is ready. Whosoever wants to use the IBC, it is available," Insolvency and Bankruptcy Board of India (IBBI) Chairman M S Sahoo told PTI.
Insolvency and Bankruptcy Code (IBC) 2016 provides comprehensive guidelines under which cases can be taken up, he said.
Last week, the government gave wide-ranging legislative powers to RBI through ordinance to issue directions to lenders to initiate insolvency proceedings for the recovery of bad loans.
As per the ordinance, such default cases identified by RBI would be dealt as IBC provisions.
RBI has been given the powers through an ordinance that authorises it to issue "directions to any banking company or banking companies to initiate insolvency resolution process in respect of a default under the provisions of the Insolvency and Bankruptcy Code (IBC), 2016," the ordinance said.
The ordinance was enacted as non-performing assets (NPAs) or bad loans of public sector banks (PSBs) reached "unacceptably high levels" of over Rs 6 lakh crore, the bulk of which are in sectors such as power, steel, road infrastructure and textiles.
RBI has been equipped with powers to specify one or more authorities to advise banks for dealing with the problem of NPAs which, as per the Ordinance, "have reached unacceptably high levels and urgent measures are required for their resolution".
The law also empowered RBI to set up oversight panels that will shield bankers from later action by probe agencies looking into loan recasts.
Banks have been reluctant to resolve NPAs through settlement schemes or sell bad loans with hair cut to asset reconstruction companies for fear of 3Cs -- CBI, CAG and CVC.
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