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The recent amendments to the Insolvency and Bankruptcy Code (IBC) are an earnest attempt to address a number of issues faced in the ongoing stressed assets cases and will help reduce timelines, enhance transparency and improve realisations from their resolution. The key amendments and their impact is summarised as below: 1. Amendment: Reduce the minimum voting threshold for the Committee of Creditors (CoC) to 66 per cent from 75 per cent for key decisions, and to 51 per cent from 75 per cent for routine decisions. CRISIL’s view: Significantly improves the decision-making powers. 2. Amendment: Allow promoters of Micro, Small and Medium Enterprises (MSMEs) who are not categorised as wilful defaulters to bid for their assets. CRISIL’s view: MSME promoters under genuine distress/hardship can participate in the bidding process. This will reduce liquidation proceedings and improve the loan recovery rate of banks. 3. Amendment: Pegs the rights of homebuyers on par with financial creditors. CRISIL’s view: Provides much-needed clarity, especially with respect to cases undergoing resolution under the IBC, where homebuyers are de facto creditors. 4. Amendment: Section 29(A) of IBC tweaked to exempt pure-play financial entities from being disqualified to bid for assets; three year window for applicant which had acquired an NPA in the past under the IBC process. CRISIL’s view: Expands the eligible pool of bidders and will enable better price discovery and therefore lesser haircuts for banks. 5. Amendment: Streamlines the bidding process by discouraging exits and late offers. CRISIL’s view: Aids in bringing faster closure to the resolution process. 6. Amendment: Liberalisation of terms for interim finance during insolvency process. CRISIL’s view: Will help resolution professional to keep the asset on a going concern basis and preserve its value. Krishnan Sitaraman, Senior Director, CRISIL Ratings, said, “The amendments will help safeguard the interest of lenders by maintaining the residual value of assets and also spur the pace of resolutions under the IBC. The fine-tuning of Section 29(A) of the IBC opens up opportunities for resolution applicants to bid once their eligibility is proven, and exempts financial entities from being disqualified from bidding. That would significantly increase the number of eligible bidders.� Almost a third of the banking sector’s non-performing assets of ~Rs 10.3 lakh crore (as of March 2018) has been referred to the National Company Law Tribunal (NCLT) under the IBC process. That number is expected to rise after the Reserve Bank of India voided all restructuring plans preceding the IBC in February 2018. Therefore, the suitable amendments in the Code will increase the efficacy of the process and will help to avoid the issues that have cropped up in resolution of existing cases. Vydianathan Ramaswamy, Associate Director, CRISIL Ratings, said, “Treating homes buyers on a par with financial creditors will give a say to the home owners in the resolution process. A clear framework outlining the manner in which they participate in the IBC resolution process is needed to avoid logistical complexities in the decision-making.� Other amendments including allowing corporate debtors to trigger insolvency resolutions under the IBC and resolution process and putting the onus on applicant to prove eligibility would strengthen the process and help to achieve better outcomes.