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The Economic Times

Is IBC the best way to treat bankrupt financial institutions? Here are some clues

For financial firms the appearance of stability is important as customer behaviour could change quickly.

By Saloni Shukla, ET Bureau |Updated: November 27, 2019, 08.11AM IST
The dynamics of a financial services firm differ vastly from those at manufacturing firms, especially during distress, because value could vapourise in a blink. A rule to resolve defaults at NBFCs is what the industry needed, but timely resolution will be key to its success, says Saloni Shukla. Financial institutions’ meltdown could be quicker than wax. Often, it’s chaotic.
its provisions, including whether it was constitutionally valid and the grading of creditors. But the Supreme Court has upheld many provisions of the law that would give comfort to lenders and investors. But what about extending it to financial companies? “Whether this experiment will be successful? The first case will be the test of that,” says PwC’s Sur.

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