subsequent to the debt recast. expectations from the insolvency framework a modern insolvency law such as the ibc deserves support and patience from all stakeholders and the attitude towards the new piece of law should not be influenced merely by losses materialised in respect of resolution of assets that have been stressed for long. at the same time, it is necessary to continue improving the regulatory regime for out - of - court resolutions through suitable harmonisation of the regimes across various classes of regulated entities as well as periodic review of the framework to keep pace with the changes in the economy and financial system. i feel that to strengthen the code further, we need to work on following four dimensions : a. the big picture in resolution : a comprehensive law like the ibc is often viewed as a last resort by the lenders – an avenue that needs to be explored after exhausting all alternatives. however, this view stems from the lack of a comprehensive vision for the future of a beleaguered borrower. various classes of lenders are governed by disjoined set of out - of - court resolution frameworks that applies separately to each class of lender. without participation of all lenders, any effort towards resolution is likely to be incomplete and would be a mere postponement of the inevitable reckoning. the time lost in pursuing such incomplete resolutions is likely to compound the eventual losses to the creditors and costs to the financial system. since this is a research conference, i would like to propose a research question : what is the average time taken between default by a borrower and the eventual filing of application for insolvency resolution by the creditors? it would also be interesting to see the relationship between such filing delays and the value deterioration that the creditors are required to recognise subsequently. b. delays in admission of insolvency applications : another disconcerting aspect is the time taken between filing of an insolvency application and the eventual admission of the application. the code prescribes a period of 14 days. however, in reality, the admission usually takes a much longer time than that. a consultation paper released by the ibbi on april 13, 2022, notes that average time taken for admission of an insolvency application by an operational creditor has increased from 468 days in 2020 - 21 to 650 days in 2021 - 22. this is longer than even the stipulated deadline for completion of a cirp under the code. such delays in admission are likely

joint lenders ’ forum, which had a similar role to play as the committee of creditors under the ibc. the asset classification standstill was comparable to the moratorium pronounced under ibc. the requirement of the majority decision being binding on the dissenting creditors was a regulatory equivalent of the statutory cramdown under ibc. however, the statutory powers available to rbi for resolution of stressed assets in the financial system are limited to the entities regulated by rbi whereas unravelling of the complex web of financial contracts and rewriting them in consonance with the income generating capabilities of an insolvent debtor required a comprehensive statutory framework with sweeping powers over various types of creditors. though well - intentioned, the schemes designed by rbi sometimes became a channel for lenders to delay recognition of financial stress in the borrowers by postponing the actual asset classification. paradigm shift under ibc the enactment of ibc in 2016 resulted in a paradigm shift in the efforts towards resolution of stressed assets in the financial system. the code marked a radical departure from the prevalent approaches in that it embraced the “ creditor - incontrol ” model as against the “ debtor - in - possession ” model that had failed to produce any tangible improvements in the credit discipline in the country. thus, the code fundamentally reset the power balance between debtors and creditors in the face of a default by the debtors. this approach is economically sound since creditors only have the contractually agreed share of the economic surplus created by a borrower with the rest of the surplus going to equity holders without any limits till a default occurs. at that point the equity holders are protected by limited liability while the creditors stand to lose up to the entirety of their exposure to the insolvent debtor. in a single stroke, the code removed “ the divine right of promoters to continue in saddle ”, as had been observed by the hon ’ ble supreme court, restoring the interests of other stakeholders, especially the creditors. the insertion of section 29a provided further fillip to the notion that an insolvent debtor has to be protected from its own management, if required, for the maximisation of value from the debtor to the society as a whole. thus, for the first time, the promoters faced with the possibility of losing control of their respective companies if financial stress is not addressed in a timely and comprehensive manner. the code also established committee of creditors as a public institution with the paramount responsibility of ensuring maximisation of value