The Modi government had come out with a brand new law to tackle the bad debt mess which had touched as high as Rs 10.5 trillion in 2016. The law was supposed to help banks recover their loans expeditiously and reduce litigation time for banks to recover dues from errant promoters. But four years later, the IBC has become a joke with even the Parliamentary Committee led by Jayant Sinha, a BJP member, seeking changes in the law. The reason: the banks are agreeing to take a haircut of as high as 95 per cent, which is as good as giving the companies free to the new owners.

The new owners are cutting deals with defaulting promoters to make sure that they get the companies for a song. It’s quite well-known that these companies are basically shell companies and the new owners are only interested in some real estate. Some of the examples of this mess are Jet Airways, Videocon Industries and Siva Industries. Expect some changes in the law soon.