ASIA-PACIFIC-WIDE Trends and Developments Contributed by: Anand Shah, Suharsh Sinha, Ishan Handa and Saloni Thakkar, AZB & Partners
130th in the World Bank’s Ease of Doing Business index, largely due to inefficiencies in the bankruptcy process that made insolvency cases drag on for years, deterring investment. The IBC brought in a time- bound, 180-day resolution process (with a 90-day extension) and introduced Insolvency Professionals, shifting the focus to creditor rights and ensuring faster, more predictable outcomes. The IBC has provided greater certainty and predictability for private credit lenders, thereby reducing the risk premium associated with Indian credit exposures. The IBC has reduced the resolution time from an average of 4.3 years to approximately 1-2 years and provided a structured process that allows businesses and/or investors to exit the market more efficiently. India’s insolvency regulators (the Ministry of Corpo - rate Affairs and the Insolvency and Bankruptcy Board of India) have a keen and proactive oversight over the implementation of the IBC, regularly collating and analysing performance data and recommend - ing improvements. Despite being new legislation, the IBC has been amended approximately six times to date, accompanied by with issuance of numerous regulations, circulars and guidelines. A latest round of amendments was introduced in parliament in August 2025 and is currently pending approval. The amend - ment bill proposes 14-15 substantive amendments, key among which include: • a regime for creditor-initiated insolvency resolution (CIIRP), which is a debtor-in-possession-creditor- in-control hybrid mechanism for efficient resolution at the pre-distress and early-distress stage; • guidelines for cross border insolvency resolution; • provisions to enable the government to prescribe rules for consolidated insolvency resolution of mul - tiple debtors who are part of the same group; • provisions to improve efficiency and results of the present insolvency regime, including provisions for: (a) mandatory admission of insolvency cases when debt and default are established and eliminating any scope for interpretational incon - sistencies or discretionary application; (b) implementation of resolution plans or closure of the resolution process notwithstanding inter - creditor disputes (as to distribution); and
(c) business wise or asset-wise resolution of large corporate debtors with multiple businesses/ verticals (for better value maximisation). Liberalisation of regime for investment by alternative investment funds AIFs, the main source of domestic private credit, are regulated by the Securities and Exchange Board of India (SEBI), which has progressively liberalised the applicable regulatory framework, particularly for Cat - egory II AIFs (which are the primary vehicles for debt funds). Recent amendments have streamlined fun - draising, investment, and disclosure norms, making it easier for both domestic and foreign investors to participate in the market. Liberalisation of ECB (external borrowing regime) A key route through which foreign debt enters India is through external commercial borrowings (ECB). ECBs are commercial loans raised by eligible resident enti - ties from recognised non-resident entities which are required to conform to strict parameters prescribed by Reserve Bank of India (RBI). However, in October 2025, the RBI proposed sweep - ing liberalisation reforms which will further enhance the attractiveness of India as a destination for global private credit funds. Key changes proposed include: • widening the pool of eligible lenders to include any non-individual resident entities; • relaxing end-use restrictions; • removing fixed cost ceilings in favour of market- based rates; • streamlining MAMP (minimum average maturity period) requirements; • regulating ECB limits to USD1 billion or three times net worth; • dispensing with procedural formalities in certain cases, for procuring with AD Bank NOCs for secu - rity creation; and • extending reporting timelines. Liberalisation of the regime for securitisation of NPLs
11 CHAMBERS.COM
Powered by FlippingBook