36.1 C
New Delhi
Sunday, May 22, 2022
HomeNews47% of insolvency cases resolved via liquidation. Details here

47% of insolvency cases resolved via liquidation. Details here


The latest data from the Insolvency & Bankruptcy Board of India shows that nearly half of 3,247 insolvency cases have been resolved through liquidation. ICRA Ratings in its analysis stated that this data “reflects a very slow pace of the process.”

ICRA in its analysis stated that data that covers all the cases since the implementation of the Insolvency and Bankruptcy Code (IBC) five years ago till December 2021 reflects a very slow pace of the process, reported by PTI.

Further, ICRA analysed that of the 7.52 lakh crore claims made by the creditors on their borrowers, the lenders could realize only 2.5 lakh crore, reflecting the pains of liquidation that lenders were forced to suffer.

Although, various NCLTs (National Company Law Tribunals) have admitted 4,946 bankruptcy cases by December 2021 end, yet, more than 10,000 applications are still pending for admission or rejection. So far, the tribunals have closed 3,247 applications while 1,699 are still ongoing.

As per ICRA, about 47% or 1,514 cases of the total 3,247 cases were resolved through liquidations, only 14% or 457 applications were settled through proper resolution plans approved by lenders. Meanwhile, as much as 22% of the total resolutions are still pending review/appeals and 17% of the total admitted cases have been withdrawn so far.

ICRA highlighted in the report that one of the main reasons for the relatively lower realization, the analysis noted, is that as much as 77% of the cases are either under the Board for Industrial and Financial Reconstruction (BIFR) or non-operational when admitted, indicating that even after five years of implementation, the IBC is still handicapped as the government has not scrapped the BIFRs and DRTs.

Highlighting the delay in the resolution process, ICRA stated that as against the mandated 90 days to close a case after admission, 73% of the cases were completed well after 270 days. While 16% of cases took 90-270 days, only a paltry 11% of cases were closed within the stipulated 90-day period.

Meanwhile, a total of 69 cases took 90-180 days to complete, 75 cases took 180-270 days, 154 applications took 270 days to one year, and 278 were completed between one and two years. The rating agency further highlighted that as many as 569 cases have taken more than two years to complete the process.

Citing the reasons for delayed resolutions, ICRA stated that were largely due to legal entanglements and the highly understaffed/overburdened NCLT benches.



Source link

- Advertisment -
- Advertisment -
- Advertisment -

Our Archieves

- Advertisment -