How IBC changed Indian Banking Forever saving 3 Lakh Crores ? : Economic Case Study

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VIDEO INTRODUCTION:

Hi everybody,

If you are a UPSC, law or an economics student this is one of the most important case studies you will ever study!! We all know what happened to kingfisher airlines right?? And if you remember, these kinds of defaults and 1000s of crores in losses were not a new thing in India at all!!

But do you realise, even Gofirst in India was and still is struggling, but somehow, bankruptcy turned out to be a good thing for them and they are still in business!! The question is how???

Similarly, in our previous episode, we saw how India was facing a banking crisis in 2017-18 with banks having 1000s of crores in bad debts!!

So India was in such a critical situation that while On one hand, our banks had 1000s of crores in bad debt, we had giant companies that were failing in such a way that the employees lost their jobs, creditors lost their money and the shareholders lost their share value! This is the reason why, in 2016, our former finance minister Arun jaitley made an iconic announcement where he introduced something called the Insolvency and bankruptcy code !!

And this one code alone has been so revolutionary that it saved 3.16 lakh crores for our banks, it saved lakhs of job losses and most importantly, today it has become one of the most important pillars of the Indian economy!!! And this is something that Sanjeev Sanyal speaks about very often!!

This is why, if you are an economics, law or a UPSC student, this Indian bankruptcy code is by far one of the most important policies you will ever study!!!

So, in this economic case study series, today let us deep dive and understand,

What were the problems that were haunting the Indian banking system?
What is the Indian bankruptcy code?
Why is it considered to be one of the most revolutionary policies in Indian history?
And how has it benefited ordinary people like you and me?

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[snpygeek]

My Dad was working in Bhusan Steel, and I myself have witnessed the entire process. None of the employee who worked at lower level lost their job. It was fantastic. Even mittal also bid for it, but eventually Tata won the bid, and saved so many jobs.

[pothanadithya]

Please make a video analyzing the economy of Andhra Pradesh post-bifurcation and the state's development and economic situation. Comparing the performance of the TDP and YSRCP governments would be incredibly informative for us to make informed decisions. Your insights on this topic would be greatly appreciated! Thanks!

[prasannakumarcooldude]

And people say BJP did nothing to the country the thing is none really knows the activity of the govt exactly. Including myself even though I didn't blame the govt i never knew about such innovative and drastic steps taken by the govt

[therandomthings]

Mr Ranghuram Rajan from Congress party had ideas, but never asked his party leaders to solve this before 2014. Either he was not explained(educated) them properly or UPA(Sonia/Rahul) don’t understand the problem at all 🤔. Kudos to Modi government for taking these initiatives 👏👏

[harshalgoti]

I am a Chartered Accountant working in the IBC field. All I can say is people misuse IBC more than for the purpose for which it was introduced. No doubt IBC has helped but to a certain extent only. The more the company maintains distance from IBC the better it is for their future. The only people who benefit from IBC are the buyers of the companies admitting into IBC. IBC is not the same today as compared to 2016 when it was introduced.

Good episode. Challenges mentioned at the end of the episode are true. Nicely covered most of the things. Many things have a negative impact also which you have positively shown in this episode. Advocates mints a lot of money out of the IBC processes other than any other person involved in the process.

[nikitajha]

Really need more cases on Indian Judiciary.

[anvivek]

Was awaiting for this episode from long since. Understood IBC in basic layman terms 👌👍🙏

[garjevikas]

After land acquisition, IBC and GST.

Judicial and agricultural reforms are the most needed and most urgent reforms the country needs.
These might be the things Modi ment, when he said "big reforms in third term."

[axem.]

Thanks for speaking on this topic. As a banker, it was hard for me to explain its importance to others

[sampadac]

As a legal professional working in IBC matters, i would say your analysis is spot on

[samsung]

Whereas congress is planning to give 50% of the population 1 lakh rupees per year.. 😂😂

[kevaldeo]

Hello Shri Ganesh Prasad. Here is one more subject for a Case Study.
The Govt of Bharat recently updated payment terms for all Enterprises towards the Micro & Small businesses at the year end. This one step, if somehow is regularised for the complete financial year, will prove a game changer for M(icro) & S(mall) Enterprises' cash flow issues and indirectly any residual bank NPAs.

[NextDM-gseb]

The only channel's notification I wait for 💯✅

[saishree]

As a company secretary student, this explanation is truly mind boggling. Brilliant explanation. 🎉

[rickysinha]

Very informative! I do believe the prototype for the three problems you mentioned in the end is being built in GIFT city. The eventual change in our legal system which is log due will come in due time. But in the meantime the government will be able to build the functional model using the insolvency laws which will be modeled after international forums at GIFT city.

[devalthakkar]

Wow on point everything 🫶🏻 even the HOUSING SOCIETY example 🔥 i have already studied in Company secretary course

[m.s.s.kalyan]

As you said, IBC is the one of the best regulations India made. This video will be one of the top 10 Think School's explanations. The example which you took to explain the whole case is outstanding.

[rajeshvora]

Great analysis thro a simple to understand analogy bro!
Again, one of the most important point holding back India is the lacunae in the legal system - the Judiciary with all it's pitfalls. Reforming the Judiciary and the Police is the most important task if India needs to up it's game in the World order.

[ayushjain]

Being a CS professional student this video is just peanuts and i feel so happy that its like a revision for me.BTW insolvency and bankruptcy code is such a revolution which has changed the whole liquidation process as well as the insolvency resolution process.One of the issues with IBC is the timeline dates, still the process doesn't complete within the specified time and creates a major backlog in the code.

[mathewjoseph]

A question that was bothering me seeing all psu banks doing good
Well explained God bless