unfortunately, in real - world situations, it is not easy to ascertain whether a borrower has become insolvent till the time a default occurs. mostly, by then, the marketable value of the assets of the borrower would have already fallen below its liabilities. as liabilities of the borrower are the assets of the lender, the inability of the borrower to pay its liabilities will reduce the value of the assets of the lender thereby impacting their ability to repay their creditors, which primarily includes depositors in the case of banks. this is the main reason why rbi is interested in timely resolution of stressed assets by the regulated entities. even where the lender is not a bank, the interconnectedness of the financial system would lead to second order effects that would adversely impact the financial system. once a borrower becomes insolvent, the natural instinct of creditors is to cut their losses by rushing for the biggest possible piece of the remaining pie of marketable assets of the concerned borrower. however, we also need to bear in mind the fact that a state of insolvency does not mean that the future prospects of the borrower are non - existent – in many cases a judicious rebalancing of debt would suffice to bring it back on track – unless the financial stress is extremely acute. almost always, a going concern should be more valuable to a creditor than a liquidated company. it is in this context that a comprehensive insolvency resolution legislation assumes importance. as such, an efficient insolvency legislation should be premised on following five pillars : i. it should prioritise going concern status over liquidation. ii. it should force the creditors to come together and work out a resolution plan that tries to preserve the value by looking at the options to keep the company as a going concern. iii. it should ensure a time bound resolution so that value deterioration for the creditors of an insolvent exposure is arrested. iv. it must provide claw back of questionable transactions that may have contributed to the financial stress of the defaulting borrower. v. finally, an effective resolution regime should protect the majority from the minority by forcing a cramdown if the majority decision covers a predefined threshold of approval. in addition to the above five principles, the resolution framework should also distinguish between various classes of financial creditors based on the quality of security available to them since the initial pricing of the

wealth in the hands of total strangers. the promise of high returns is so tempting that individuals who are in other circumstances perfectly rational and ready even to advise others of good investment outlets get carried by enchanting talks and end up losing their money. the responsibility of microfinance practitioners the wide - spread existence of spurious microfinance institutions in the society projects the entire microfinance industry as a fraudulent activity in the eyes of the public and law enforcement authorities. this is not a healthy sign for the future of microfinance industry at all. microfinance practitioners should put a stop to this unhealthy development by establishing a proper governance structure in microfinance institutions. they teach the poor of the importance of and the need for leading a responsible life. this responsible life includes behavioural traits like being truthful, being honest, being respectful and being exemplary. the cultivation of these qualities in life makes the poor wholesome individuals and that is the ultimate goal of any microfinance intervention in the society. if the microfinance practitioners do not practise what they preach, then, it is a serious lapse of the governance structure of microfinance institutions. since governance principles are rules of good behaviour and there is no effective way of ensuring their proper practice, the practitioners should make an extra effort to follow them. it requires full commitment and devotion on the part of microfinance practitioners and, in turn, depends on the personal qualities which they have cultivated in themselves. such quality developments come from long - term training, discipline and fear of losing credibility and reputation. in other words, microfinance practitioners should have the long - term sustainability, and not quick profit, as their goal. it is, therefore, necessary to develop microfinance practitioners before they are allowed to develop microfinance beneficiaries. noble eight - fold path is a guide for everyone the buddha preached the noble eight - fold path to be followed by both the kings and the subjects alike. it is a complete personal development programme for those who aspire to become successful and be of help to others in the society. it is a moral code that requires people to speak rightly, act rightly, live rightly, make efforts rightly, know rightly, concentrate rightly, think rightly and understand rightly. the noble eight - fold path is not a moral code that should be enforced by means of a moral law. it is simply a voluntary action which everyone should follow for