The performance of the Committee of Creditors (CoC) has come under scrutiny by the Reserve Bank of India (RBI). Deputy Governor R. Gandhi Rao raised concerns about the CoC’s lack of effectiveness in safeguarding creditors’ interests and ensuring smoother resolution processes.
RBI Calls for a Code of Conduct for Creditors
Rao emphasized that the CoC must adopt a structured code of conduct to improve decision-making and accountability. According to the Deputy Governor, clearer guidelines would help in achieving better outcomes for all stakeholders, including creditors and debtors.
Importance of Stronger Governance Mechanisms
The RBI official also stressed the need for stronger governance frameworks within the CoC to enhance operational transparency and efficiency. Rao’s comments come at a time when the committee’s role in the resolution of distressed assets has been increasingly questioned.
The Path Forward for Creditors
The call for a formal code of conduct highlights the importance of restructuring the CoC’s approach to insolvency cases. It is expected that RBI’s push for better governance will lead to reforms aimed at improving the overall performance of the insolvency resolution process.
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