New Delhi, May 28 -- When Parliament took up a new bankruptcy code for passage in May 2016, the minister who replied to the debate in Lok Sabha, Jayant Sinha, mentioned its critical place in the overall economic agenda of the government-a friction-free exit for the corporate sector, complementing the policy support given to startups and entrepreneurship.

Under the Insolvency and Bankruptcy Code (IBC), large distressed companies like Bhushan Power & Steel, Essar Steel India, Monnet Ispat & Energy Ltd and Electrosteel Steels Ltd-which were among the Reserve Bank of India (RBI's) 'dirty dozen' found new owners, leading to a reduction of toxic assets in the banking sector and revival of these businesses.

Financial service providers Dewan Ho...