SC Only Quashed RBI Circular on Bad Loans, the Insolvency Law Still Hangs on Private Firms

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In The Media

Carnegie India

SC Only Quashed RBI Circular on Bad Loans, the Insolvency Law Still Hangs on Private Firms

The Supreme Court’s recent decision striking down the RBI’s February 2018 circular on bad loans highlights something significant about the state machinery—the extent to which it can be a source of risk for private businesses.

By Anirudh Burman

Published on Apr 5, 2019

Source: Print

The Supreme Court’s recent decision striking down the RBI’s February 2018 circular on bad loans highlights something significant about the state machinery — the extent to which it can be a source of risk for private businesses.

In that sense, the ruling provides an immediate relief to promoters in the power sector — mainly because the petitions challenging the RBI circular were primarily filed by power sector companies — from being dragged to insolvency courts under the Narendra Modi government’s 2016 legislation, the Insolvency and Bankruptcy Code (IBC).

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This article was originally published in the Print.

About the Author

Anirudh Burman

Former Associate Research Director and Fellow, Carnegie India

Anirudh Burman was an associate research director and fellow at Carnegie India. He works on key issues relating to public institutions, public administration, the administrative and regulatory state, and state capacity.

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Carnegie India does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.

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