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August 18, 2026
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Foreign-exchange conditions reflected rupee depreciation amid weak domestic equity markets and higher crude oil prices. FCNR(B) concessional swap facility availability is confined to foreign currency deposits mobilised by banks within the revised cut-off period, replacing the previously longer mobilisation window. The facility is intended to encourage foreign currency inflows, while banks use the FCNR(B) scheme to mobilise foreign currency deposits through attractive interest rates.
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Prime Minister Internship Scheme enhances youth employability through paid industry exposure, cross-field learning, workplace readiness and potential full-time employment.
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August 17, 2026
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SAFTA origin fraud in areca imports allegedly enabled improper duty exemption through false Bangladeshi-origin declarations.
SAFTA preferential duty treatment for areca-nut imports was allegedly misused by falsely declaring goods originating in South-East Asian countries as Bangladeshi origin. Since areca nuts normally attract 100% basic customs duty, the scheme sought to obtain the full SAFTA exemption reserved for qualifying Bangladeshi goods meeting Rules of Origin requirements. The alleged mechanism included routing goods through Bangladesh, changing containers and bags, using improperly obtained Certificates of Origin, and facilitating clearance through importers, Customs Brokers and IEC holders. Investigative findings also indicated cash proceeds, hawala channels and dummy entities.
August 17, 2026
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FCNR(B) concessional swap facility closure may reduce temporary foreign-currency inflow support and heighten rupee weakness concerns.
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August 16, 2026
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Temporary tariff suspension for earthquake recovery is sought to ease pressure on affected Colombian businesses.
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August 16, 2026
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Port-led industrial development and direct export operations aim to expand logistics infrastructure, market access and trade connectivity.
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LPG production preparedness requires refiners and upstream producers to maintain capacity and increase output during supply constraints.
Government has established a standing LPG production preparedness framework under which refining companies, oil marketing companies and upstream producers may be directed to increase production during supply constraints. Companies must maintain adequate LPG storage, evacuation and transportation infrastructure and pursue technically and economically feasible production-enhancing measures. Written directions may prescribe production quantities and periods, including restrictions on alternative uses of input streams required for LPG. The production schedule is updated twice yearly to reflect new facilities and added capacity from infrastructure, technology and distribution improvements.
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Free trade agreement market access requires MSMEs, farmers and exporters to meet global quality standards.
Free trade agreements expand market-access opportunities for Indian MSMEs, exporters and producers through reduced or eliminated import duties on traded goods. Textiles, machinery, medicines, seafood and agricultural products can access international markets where they meet global standards and remain competitively priced. Farmers and producers are encouraged to develop export-oriented products, including chemical-free agricultural produce, while MSMEs may use preferential trade access to support manufacturing, exports, employment and growth.
August 15, 2026
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Chemical-free farming can strengthen agricultural exports by meeting global standards and responding to rising international demand.
Chemical-free farming is urged to meet growing global demand and expand agricultural exports. Agricultural products must meet global parameters to facilitate access to international markets, including markets opened through free trade agreements. Food processing, export-oriented farm production, and global branding of traditional cuisine, millets, spices, fruits and flowers are identified as important elements of agriculture and food production policy.
August 15, 2026
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Voluntary foreign asset disclosure allows eligible taxpayers to regularise overseas holdings with immunity from further tax, penalties and prosecution.
FAST-DS permits eligible taxpayers to disclose specified undisclosed foreign assets, foreign income, and foreign assets omitted from return schedules. Undisclosed assets or income not previously offered to tax may be declared up to Rs 1 crore on payment of an effective 60 per cent levy, based on fair market value as of 31 March 2026. Assets already offered to tax, or acquired during non-resident status but omitted from the return schedule, may be declared up to Rs 5 crore on payment of a fee. Valid declarations provide immunity from further tax, penalty and prosecution, while declared amounts are excluded from total income.
August 15, 2026
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Global pharmaceutical leadership is urged through Indian firms achieving top-five status, supported by generic manufacturing and export capacity.
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August 15, 2026
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Foreign asset voluntary disclosure permits eligible small taxpayers to regularise qualifying assets through tax, additional levy, and statutory immunity.
FAST-DS permits eligible small taxpayers to voluntarily disclose specified foreign assets or foreign income. It covers undisclosed foreign assets or income not offered to tax, subject to an aggregate value threshold of Rs 1 crore, and certain foreign assets omitted from the relevant return schedule, subject to a Rs 5 crore threshold and prescribed fee. Payment comprises 30 per cent tax and an additional equal amount. Disclosed income or investment is excluded from total income, with immunity from further tax, penalty and prosecution under the Black Money Act for the disclosed asset or income.
August 15, 2026
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Free trade agreement opportunities require MSMEs to meet global standards and expand exports across textiles, machinery, medicines and seafood.
Free trade agreements are presented as export-market opportunities for Indian MSMEs because they reduce or eliminate import duties on a substantial range of traded goods. MSMEs are urged to expand exports of textiles, machinery, medicines and seafood, including shrimp, by meeting global quality standards and offering products competitively. Their export role is linked to self-reliance and their significant contribution to manufacturing, exports, GDP and employment.
August 15, 2026
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Windfall gains tax on petroleum exports was reduced to support domestic fuel availability and limit export price advantages.
Special additional excise duty (windfall gains tax) on exports of petrol, diesel and aviation turbine fuel was reduced from 15 August 2026. Petrol export duty was reduced to nil, and export-duty rates on diesel and ATF were lowered. Duty rates for petrol and diesel cleared for domestic consumption remained unchanged. The export-duty framework seeks to maintain domestic petroleum-product availability and limit export advantages arising from higher global crude oil prices amid West Asia tensions.

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Resolution of Stressed Assets and IBC – the Future Road Map (Speech by Shri Swaminathan J, Deputy Governor, Reserve Bank of India - January 10, 2024 - at the Conference on Resolution of Stressed Assets, and IBC organised by CAFRAL in Mumbai)

January 17, 2024

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Director, CAFRAL, Shri B P Kanungo; Shri N S Vishwanathan former Deputy Governor RBI, Smt. Indrani Banerjee, Additional Director CAFRAL, Shri Diwakar Gupta, Senior Advisor, CAFRAL, distinguished guests from the financial fraternity; and ladies and gentlemen.

1. I am delighted to be present here at this very topical Conference on Resolution of Stressed Assets and Insolvency and Bankruptcy Code – the Future Road Map. The IBC notified in May 2016 introduced a comprehensive legislation that introduced a paradigm shift in the landscape of insolvency and bankruptcy proceedings in India, bringing in a more structured, institutionalised and time-sensitive approach to resolving financial distress.

2. The IBC has been in operation for almost eight years now. Although this time frame is not very significant in the life cycle of a legislation, the IBC has been an evolving law with several amendments since its enactment. Last year, the Ministry of Corporate Affairs released a public consultation paper proposing several amendments including mandatory admission of applications where default is established, increasing reliance on records submitted by Information Utilities, streamlining the resolution process, etc. These as well as some other proposals on the IBC have been a subject matter of discussion among professionals, bankers, legal fraternity, regulators and other stakeholders. So, it is an opportune time to review the working of the IBC and discuss its future course. I am happy to note that CAFRAL has assembled an illustrious list of speakers covering eminent jurists, policy makers, bankers and resolution professionals who will enrich this seminar with their varied perspectives.

3. Let me start this series of sessions and discussion by sharing some of my own perspectives on this landmark legislation and the road ahead.

Paradigm change brought in by the IBC

4. Before the implementation of the IBC, there existed a fragmented legal framework which resulted in protracted and inefficient insolvency proceedings. Various laws and regulations, each dealing with distinct aspects of insolvency and bankruptcy, co-existed, creating complexities, overlaps, and occasional contradictions. In the absence of a comprehensive law, the RBI too had attempted to fill the void with a series of schemes such as Corporate Debt Restructuring (CDR) Scheme, Strategic Debt Restructuring (SDR), Scheme for Sustainable Structuring of Stressed Assets (S4A), etc. These schemes, sometimes fondly referred to as an ‘Alphabet Soup’ in some sections of the media, attempted to emulate the desirable features of an insolvency legislation.

5. The IBC was enacted to fill the legal void felt by the absence of a comprehensive insolvency law. Its salient features included a unified and time-bound resolution process, establishment of resolution focussed adjudicating authorities such as the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT), as well as the establishment of the Insolvency and Bankruptcy Board of India (IBBI) to ensure effective regulation of insolvency proceedings and professionals. The IBC also facilitates corporate insolvency resolution through the formation of a Committee of Creditors (CoC) and a structured liquidation process if resolution is not achieved within the specified time, thus contributing to a more streamlined and transparent system.

6. In my view, the IBC meets the five principal criteria1 of an efficient resolution regime, namely:

  1. Firstly, the resolution regime should prioritise going concern status over liquidation. Resolution on a going concern basis is generally more valuable than liquidation of the entity.

  2. Secondly, 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.

  3. Thirdly, the resolution regime should ensure a time bound resolution so that value deterioration for the creditors of an insolvent exposure is arrested.

  4. Fourthly, it must provide claw back of questionable transactions that may have contributed to the financial stress of the defaulting borrower.

  5. Finally, an effective resolution regime should protect the majority creditors from the minority by forcing a ‘cramdown’ if the majority creditors decision covers a predefined threshold of approval.

Positive outcomes

7. The outcomes of the Code have also played out reasonably well so far. This has brought in substantial efficiency in the resolution process and improvement in recovery rates for financial creditors.

8. From a banker’s and supervisor’s perspective, amongst the various improvements brought in by the IBC, the fundamental shift from a ‘debtor in possession’ to a ‘creditor in control’ model is perhaps one of the most impactful. There is growing evidence to suggest that debtors are avoiding defaults due to a credible threat of loss of control of their businesses. I believe this improved credit discipline has inter-alia also contributed to the marked decline in the non-performing assets of banks witnessed in the last few years.

Challenges and Criticism

9. IBC, while significantly transforming the insolvency landscape, has encountered challenges and criticisms. Timely resolution, a crucial goal of the IBC, faces obstacles may be due to certain operational inefficiencies, leading to delays in the resolution process. Concerns have been raised about the infrastructure, staffing, and overall capacity of the NCLT and the NCLAT, impacting the effectiveness of the resolution mechanism. Evolving provisions for cross-border insolvency also contribute to the areas where the IBC has faced difficulties.

10. It is also observed that there are certain discussions playing out about the recovery percentage through IBC process. The point to be noted is that the IBC is a resolution framework rather than a recovery framework and any commentary based solely on recovery percentages may overlook the broader objectives and achievements of this transformative legislation. While recovery may be an essential component, the true strength of the IBC lies in its objective to resolve corporate financial stress, preserve enterprise value, protect the interests of various stakeholders, and thereby contribute to the overall economic stability. Therefore, a nuanced evaluation that considers the transformative impact on corporate behaviour, the efficiency of the resolution process, and the preservation of business value is essential for a comprehensive understanding of the IBC's success and effectiveness.

The Way Forward

11. India is aspiring to become a developed country by 2047. But, for that to happen, we need to fully utilise all the available resources in the country, be it the demographic advantage, or the physical resources. One of the important enablers of faster economic growth is the ease of doing business.

12. An orderly resolution framework is closely related to the ease of doing business, influencing the business environment in several ways. Businesses operate in a dynamic environment where there may be success or failure. An orderly resolution process allows for smoother exit. It reduces capital erosion and facilitates efficient recycling of capital. Further, an orderly resolution mechanism instils confidence in investors by providing a transparent and predictable process for handling financial distress.

13. Businesses rely on credit for their operations and expansion. Orderly resolution and credit cost are interlinked elements within the financial ecosystem. The Expected Loss is a key factor that determines this credit cost. Expected Loss in turn is driven by the ‘probability of default’ and more pertinently to today’s context on resolution, the ‘loss given default’ or LGD. Therefore, there is a need to make resolution process efficient to minimise the LGD. Further, when lenders have the confidence that they can recover their money more reliably and in a timely manner, they are more inclined to lend which boosts the flow of credit in the economy, thereby supporting business and economic growth.

14. From a banker’s perspective, it starts at the underwriting stage itself. Bankers base their decision on the viability of the borrower. However, there is a need to also factor in the possibility of a stress leading to resolution and potential challenges the lenders may face in realisation of assets, at the underwriting stage itself.

15. At the resolution stage, as major creditors, banks also participate in the Committee of Creditors or CoCs which is entrusted with critical decisions regarding the resolution process. The CoC representation requires a diverse skill set spanning financial acumen, legal understanding and industry knowledge. Further, given the time bound nature of the process, the CoCs need to act with a sense of purpose making a pragmatic assessment of available options and deciding swiftly. Therefore, banks need to ensure that their nominees are empowered with adequate authority and experience. Their active involvement in sharing of information, evaluating and approving resolution plans as well as collaboration with resolution professionals and other stakeholders is imperative in ensuring timely resolution.

16. The success of IBC also hinges on the expertise and proficiency of skilled resolution professionals. They need to be equipped with a thorough knowledge of the law as well as have a sound understanding of the nuances of finance apart from strong negotiation and management skills. I believe the Insolvency and Bankruptcy Board of India is already conducting various programmes to impart the specialised skills and knowledge required for resolution professionals. The Indian Banks Association and CAFRAL can also assist and collaborate with IBBI in such initiatives for effective capacity enhancement.

17. From the Government and Judiciary’s side, there is a pressing need to invest in building the capacity of adjudicating authorities, such as the NCLT and the NCLAT, to handle an increasing caseload efficiently. Adequate staffing, training, and infrastructure of these institutions will go a long way in expediting resolution. In fact, last year the Government took measures to fill up vacancies and it is understood that proposals to increase the strength of adjudicating authorities is also under consideration. Efforts could also be made to reduce delays at the admission stage itself as well as rationalising the processes. For instance, I understand that one of the proposals in this regard is the streamlining of data submission to the Information Utilities (IUs) and allowing admission based on data available with IUs. Innovative technology-based solutions are also being explored to facilitate faster disposal of cases.

18. The introduction of new laws often brings about a period of adjustment and interpretation as stakeholders, legal professionals, and the judiciary grapple with the intricacies of the legislation. In the context of the IBC, this phenomenon is heightened due to the significant stakes involved. Parties involved in insolvency proceedings do file appeals and review petitions challenging lower court decisions. While there is no objection to any party seeking legitimate legal recourse, these proceedings have often been used as delaying tactics by defaulting borrowers and has significantly contributed to delays in the resolution timeline. One hopes that as the law matures, judicial interpretation and precedents would emerge to help navigate the nuances, ultimately reducing delays in future. It is conceivable that certain judicial interpretations may prompt the need for further reforms, aiming to enhance the efficiency and improve the outcomes of the resolution regime.

19. From a reform agenda perspective, there are also some aspects of IBC that merit further legislative consideration. For instance, there is a need to look at resolution of conglomerates and addressing resolution of corporate groups. Very often such groups have intricate corporate structure with inter-connected related party relationship that add to the complexity and become a hurdle in individual entity resolution. Similarly, there is the unfinished agenda of a comprehensive resolution framework for financial service providers such as banks, non-banking financial companies and insurance companies. In the absence of an IBC like legislative framework for resolution of financial institutions, the IBC has been used for resolution of NBFCs. I would imagine that this conference will get to debate these and several other measures that can be thought about to bring in a more efficient IBC process in the days to come.

Conclusion

20. To conclude, the IBC is a landmark legislation which completely transformed the insolvency and resolution framework in the country. There is a visible improvement in the credit culture as evident from the marked decline in NPAs and increased resolutions even before the admission stage. Further, significant foundational work has been done by the Government and it is expected that the next set of reforms once legislated by the Parliament would further strengthen the IBC. However, there is always scope for improvement, especially with regard to the timeliness of the resolution process.

21. With these closing remarks, I once again thank CAFRAL for this opportunity to share my thoughts here today. I am sure the deliberations and insights shared by esteemed participants will contribute to the wealth of knowledge in the field of insolvency and bankruptcy, fostering innovative solutions and paving the way for a more robust and efficient financial landscape. I sincerely hope that the outcomes of this conference will not only benefit the participants but will also have a far-reaching impact on the broader economic ecosystem. Wishing the organizers, speakers, and participants a truly enlightening and successful event ahead. Thank you.

------

1 Resolution of Stressed Assets and IBC, Speech delivered by Shri M Rajeshwar Rao, Deputy Governor, RBI on April 30, 2022 at the International Research Conference on Insolvency and Bankruptcy held at IIM Ahmedabad.

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