India Business News: A series of judgments in the Supreme Court has established the unbridled power of the committee of creditors (CoC) in insolvency cases. However, the C
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If bankers are reluctant to provide working capital loans to cash-strapped MSMEs, what is in it for them to fund MSMEs through factoring? If it is fatter fees, commissions or larger discounts, then factoring is a costly proposal for them. Also, when the banking industry is short on capital to lend, financing to MSMEs through either factoring or working capital loans will be limited.
The top court also made clear that investors cannot redeem such shares before the National Company Law Tribunal has ruled either way – whether investors can convert such shares or not – under the Insolvency and Bankruptcy Code.
The new insolvency and bankruptcy code (IBC) has been often criticised for low recovery rate. But it is a new law and as the law stabilises, there will be more favorable results