Insolvency professionals face a reckoning

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Editor's note: “Bankers told me he is shady. It’s not just one case, but even in other cases he handled there are problems. Conflict of interest is a big issue that has not been addressed,” says an insolvency professional, asking not to be named. He is talking about a rival professional who was suspended by the Insolvency and Bankruptcy Board of India, or IBBI, in May this year.  At its peak in March 2018, around 11.5% of all bank loans were in default, amounting to Rs 10.4 lakh crore. That figure stands at 5.9% or a little over Rs 7 lakh crore as of 31 March 2022. This decrease in bad loans in the Indian banking system is in large part due to the Insolvency and Bankruptcy Code, which came into force more than five years ago. In this time, more than 5,250 companies have been admitted for proceedings under the code. Of this, 3,400 companies were admitted under the IBC’s corporate insolvency resolution process, while more than 1,600 were sent for liquidation as of March 2022. According to data from the …