Impact Of Indian Debt Recovery System On Consortium Lending: A Comparative Analysis Of IBC And Sarfaesi Act

Manoj Aditya, Symbiosis Law School

ABSTRACT

The SARFAESI Act and the IBC are the main topics of this paper's exploration into the Indian legislation's recovery of debt and insolvency resolution environment. The SARFAESI Act affects consortium lending by enabling quick secured asset recovery. Lenders find it attractive because it gives them a legal basis for asset security and consortia financing. But when it comes to managing complex financial arrangements and unsecured loans, it is inadequate. By introducing transparent structure and time-bound resolution mechanisms, the IBC, on the other hand, modernises insolvency proceedings. It attempts to improve confidence in the investment climate by establishing a predictable and well-organized insolvency environment. The particular objectives and conditions of the creditors will determine which of SARFAESI and IBC to use. This paper offers valuable insights to assist banks and creditors in making well- informed judgements on the intricate realm of debt recovery and insolvency in India.

Keywords: SARFAESI Act, IBC, Consortium banking, Financial Arrangements