CoC Code of Conduct: IBC Oversight Panel Proposal
Why in the news
The Ministry of Corporate Affairs (MCA) is weighing a panel to supervise how the Committee of Creditors (CoC) behaves in insolvency cases under the Insolvency and Bankruptcy Code (IBC). The Supreme Court had pointed to the need during the Jet Airways liquidation matter.
Key facts
- The court called the Jet Airways proceedings an eye-opener on gaps in the framework and wanted enforcement beyond self-regulation.
- In August 2024, the IBBI issued guidelines asking the CoC to keep integrity, confidentiality and objectivity, declare conflicts of interest, and stay current on IBC rules.
- The court found these guidelines unenforceable and suggested an independent mechanism, possibly an oversight committee.
- The Delhi High Court (February 2024) had told the IBBI to draft a CoC code while protecting the commercial wisdom principle; an IBBI discussion paper of 2021 began the groundwork.
- Sterling Biotech case: 90.32% of creditors accepted a one-time settlement from absconding promoters, which the NCLT criticised.
ICRA’s FY26 outlook for banks
| Measure | Estimate |
|---|---|
| Bad-loan write-offs | ₹1.51 trillion |
| Credit growth | 10.8-10.9% (about ₹20.2 trillion), earlier view 9.7-10.3% |
| Credit expansion | ₹19-20.5 trillion (FY25: ₹18 trillion) |
| Repo rate cuts | 75 bps cumulative from February 2025 |
| Fall in NIMs | 15-17 bps |
Profitability may dip slightly but is expected to remain comfortable.
Exam angle
- Regulator behind CoC guidelines: IBBI (August 2024).
- Case that triggered the idea: Jet Airways liquidation.
- Rating agency forecasts: ICRA, FY26 write-offs ₹1.51 trillion.