Creditors recover Rs 3trn via IBC

Resolutions under insolvency law likely to touch 300 this fiscal; efforts on to speed up process: Officials

Insolvency Process

♦ Recoveries were over Rs51,000 cr last year

♦ Number of resolutions rose 80% to 180

♦ Till August this year, 135 resolutions took place

The number of resolutions of stressed assets under the insolvency law is likely to touch 300 this financial year, after rising 80 per cent in the last fiscal, and efforts are on to speed up the process for faster resolutions, senior officials said on Sunday.

Corporate Affairs Secretary Manoj Govil said the Insolvency and Bankruptcy Code (IBC) ecosystem needs to be prepared to deal with 1,000 resolutions. Under the IBC, which provides for a market-linked and time-bound resolution process of stressed assets, creditors have witnessed recoveries of nearly Rs3 lakh crore so far and the recovery amount stood at more than Rs51,000 crore in 2022-23 financial year.

The Insolvency and Bankruptcy Board of India (IBBI) Chairperson Ravi Mital said the number of resolutions rose 80 per cent to 180 in the last financial year and is likely to touch 300 this year (2023-24 fiscal) and added that till August 2023, the resolutions stood at around 135.

Further, he urged insolvency resolution professionals to speed up their efforts in resolving the cases.

Speaking at the event in the national capital to mark the seventh annual day of the IBBI, a key institution in implementing the IBC, Mital said the law is a factor in the reduction of non-performing assets. He also stressed that the law is not a recovery mechanism but a resolution mechanism. Govil said efforts are on to speed up the resolution process and that the government is willing to take up amendments to the IBC to make the resolution process faster. Mentioning about the pace of resolutions under the IBC, Govil said this financial year, the expectation is that the number of resolutions will go up to 300 and also wondered whether that is sufficient to unclog the pipeline. Citing a study, he said that around 5,000 new cases are filed every year under the IBC and added that the IBC ecosystem should have the capacity to deal with at least 1,000 resolutions.