Page 53 - BANKING FINANCE APRIL 2024

ARTICLE

Some guiding principles on Code of Conduct for Committee legal and also suggest minimum thresholds of
of Creditors: representation for such experts to encourage more
(a) demonstrable transparency in the conduct of the CoC diverse and multi-faceted discussions.
especially with regard to conflict-of interest issues.
commercial wisdom of CoC to be supported by suitable The introduction of these principles and processes will
and reasoned back up information and data; strengthen the ability of the CoC to exercise its commercial
wisdom for the benefit of the CD, while also ensuring that
(b) maintain arm's length with RPs in respect of jurisdiction
and responsibilities, especially in respect of engagement the interests of all stakeholders are best served and could
of professionals and in the area of treatment of greatly strengthen the CIRP, maximise value for all
stakeholders with high levels of process conduct.
avoidance transactions.
(c) appropriate penalties or disciplinary action for a CoC
member on account of misconduct or malfeasance while Conclusion:
being on the CoC, subject to decisions taken in good faith The commercial wisdom of the Committee of Creditors is
applying business judgement rule. integral to the success of the insolvency resolution process
under the IBC in India. Balancing financial considerations
(d) strict adherence to timelines stipulated in the Code and
with qualitative factors, the CoC plays a pivotal role in
the regulations made thereunder.
determining the future of distressed companies. While
(e) minimum stipulated professional and empowered
challenges and controversies may arise, the evolving
competency of the members representing the creditors
jurisprudence and judicial scrutiny provide a framework for
in the CoC meetings. refining the application of commercial wisdom in insolvency
(f) in respect of large resolutions, the CoC to be proceedings, ultimately contributing to the effectiveness of
encouraged to have a heterogeneous composition such the IBC in achieving its objectives. A proper Code of conduct
as involving experts from different areas of specialisation for CoC can promote transparency and fairness in the
such as compliance, credit, risk, investment banking, insolvency process.

Exchange and deposit facility of Rs. 2000 bank notes at RBI offices

temporarily unavailable on April 1
The Reserve Bank of India (RBI) has announced that the facility for exchanging and depositing Rs. 2000 banknotes
will not be available on April 1 at 19 of its issuing offices. The central bank cited operations associated with the
annual closing of accounts as the reason for this temporary suspension. In an official release, the RBI said that the
facility will resume on April 2.
The exchange of Rs. 2000 banknotes has been available at the 19 RBI issue offices since May 19, 2023. Additionally,
from October 9, 2023, these offices began accepting Rs. 2000 banknotes from individuals and entities for deposit
into their bank accounts.
According to the RBI's statistics, as of March 1, 2024, 97.62 per cent of the Rs. 2,000 currency notes in circulation
as of May 19, 2023, have been returned to the banking system. The total value of Rs. 2000 banknotes in circulation
declined from Rs. 3.56 lakh crore at the close of business on May 19, 2023, to Rs. 8,470 crore as of the close of
business on February 29, 2024.
The RBI announced the withdrawal of Rs. 2,000 banknotes on May 19, 2023, as part of its clean note policy. These
high-denomination notes were introduced in November 2016, following the withdrawal of the legal tender status of
all Rs. 500 and Rs. 1,000 banknotes in circulation at the time.
While the temporary suspension of the exchange and deposit facility may cause some inconvenience, the RBI's move
is a routine annual procedure related to its account closing operations. The central bank assured that the facility will
resume on April 2, allowing the public to continue exchanging and depositing the Rs. 2000 banknotes.

48 | 2024 | APRIL | BANKING FINANCE