India reexamines its landmark bankruptcy reforms

Weak recoveries and long delays prompt calls for a makeover of 5-year-old law

20210924 india's IBC story

A wave of defaults need to be resolved after India's COVID crisis, raising fears that bankruptcy courts could become overwhelmed. (Source photos by Reuters and Kosaku Mimura)

DEV CHATTERJEE, Contributing writer

MUMBAI -- India is planning new measures to clarify a landmark corporate bankruptcy law that was meant to bring the nation's largest corporate borrowers to heel, amid complaints it has become a "mockery of justice."

The law giving more power to creditors was one of the Modi government's signature reforms, but five years after it came into effect, banks are still taking big losses in bankruptcies and the debt resolution process has been plagued by delays and legal uncertainty.

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