IBC emerges as major mode of NPA recovery

By EDITORIAL TEAM INSOL India Posted On : March 15, 2021

Non-performing assets (“NPAs”) recovered by scheduled commercial banks by way of CIRP under the IBC increased to about 61 per cent of the total amount recovered. IBC, under which recovery is incidental to the rescue of companies, remained the dominant mode of recovery, according to RBI’s Report on Trend and Progress of Banking in India 2019-20.

%u200BThe SARFAESI Act has also become the second most effective way to recover loans and NPAs which have financial institutions and banks as major lenders. The IBC was primarily enacted to help banks recover a higher amount of bad loans than they had earlier. With its time bound procedures, the IBC (though it is still evolving) has paved the way for a better and more efficient mode for recovery of debts.