In a big boost to Narendra Modi government’s ruthless efforts to revive stressed assets, the Insolvency and Bankruptcy Code (IBC) seems to be delivering results as it has helped resolve stressed assets worth Rs 3 lakh crore in the last two years, a senior government official said on Saturday.
According to reports, more than 9,000 cases have come for redressal under the Insolvency and Bankruptcy Code (IBC) after it became fully operational in December 2016. More than 85% of the cases were reportedly resolved prior to admission in the National Company Law Tribunal on the joint request of debtor and creditor.
Speaking at an event hosted by industry body FICCI, Corporate Affairs Secretary Injeti Srinivas said that more than 3,500 cases have been resolved at the pre-admission stage and has resulted in claims worth ₹1.2 lakh crore getting settled.
Srinivas further said the Insolvency law has disposed of about 4,400 cases of the 9,000-odd cases that it received in the last two years, including those transferred from the Board for Industrial and Financial Reconstruction (BIFR).
Out of the 1300 cases that are admitted, in about 400 cases, corporate insolvency resolution process (CIRP) has already completed. In another 60 cases, resolution plan has been approved and for 240 cases liquidation orders have been issued. Further 126 cases are in appeal stage and all the resolution of cases have resulted in Rs.71,000 crore of recovery till now, said Injeti Srinivas.
The cases which are at a mature stage of the resolution under the Code, he said the amount would be another Rs 50,000 crore. Further, he added that 1.2 lakh crore coming through resolutions and another Rs 1.2 lakh crore from pre-admission settlements will lead to recoveries of Rs 2.4 lakh crore in the coming months.
The Corporate Affairs Secretary noted that there are non-standard NPA accounts that have been converted to standard accounts by virtue of borrowers paying back the overdue amount and that figure would be around Rs 45,000 to 50,000 crore. Together, the amount will be close to Rs 3 lakh crore in terms of stressed assets that have been directly and indirectly impacted by the Code, he added.
“So, that takes you close to Rs 3 lakh crore, direct and indirect impact of the IBC, which is a huge amount,” said Corporate Affairs Secretary Injeti Srinivas.
The Insolvency and Bankruptcy Code (IBC) 2016, a bankruptcy law in India brought by the Narendra Modi led NDA government seeking to consolidate the existing framework by creating a single Law for Insolvency and Bankruptcy. The Code provides a time-bound process for resolving insolvency in companies and among individuals resulting in much-needed impetus to solving the problem of stressed assets and NPAs in the financial sector of the country.
