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Deputy Governor M Rajeswara Rao on Saturday pitched for an enforceable code of conduct for the Committee of Creditors (CoC) under the insolvency resolution process. Rao said the Insolvency and Bankruptcy Code (IBC) introduced in 2016 has provided significant impetus as a recovery and resolution mechanism.
New Delhi. Reserve Bank of India Deputy Governor M Rajeswara Rao on Saturday pitched for an enforceable code of conduct for the Committee of Creditors (CoC) under the insolvency resolution process. Rao said the Insolvency and Bankruptcy Code (IBC) introduced in 2016 has provided significant impetus as a recovery and resolution mechanism. He said that there is a need for significant reforms regarding the area of COC. COC has an important role in implementing the corporate insolvency resolution process under IBC. Rao said at a conference in the national capital that there were instances where the COC's performance was found lacking in several aspects.
These include concerns like prioritizing the interests of individual lenders over the collective interests of the group, low valuations and perceived lack of viability, he said. Rao said that even when a resolution plan is agreed upon, non-participation in CoC meetings and lack of effective engagement, coordination or exchange of information among members has been observed. “We need an enforceable code of conduct for the CoC,” he said. He said that ideally IBBI should have powers to enforce norms for conduct of all stakeholders.
Disclaimer: Prabhasakshi has not edited this news. This news has been published from PTI-language feed.
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