IBBI: 79% of ongoing cases unresolved for over 270 days – The Financial Express

Clipped from: https://www.financialexpress.com/industry/ibbi-79-of-ongoing-cases-unresolved-for-over-270-days/2264016/

In January-March quarter, 29 insolvency cases were successfully resolved, with creditors recovering Rs 4,600 crore out of a total claim of Rs 17,389 crore

The number of the unresolved cases is high even after IBBI had allowed exclusion of the lockdown period from the calculation of CIRP process last March.

By Ankur Mishra

The pandemic has affected the resolution process under the Insolvency and Bankruptcy Code (IBC) regime, which is in its fifth year. Latest data showed further delays in resolutions and low recovery in 2020-21. According to data released by the Insolvency and Bankruptcy Board of India (IBBI), 79% of the ongoing cases remained unresolved for more than 270 days till March 2021.

This is a steep rise compared to March 2020 (Q4FY20), when only 35% of the ongoing cases had taken more than 270 days. The data also showed that average time taken to resolve a case was 459 days as of March 2021, compared to 378 days as of March 2020. The data is important as IBC stipulates that the resolution process of a stressed company should be completed in a maximum of 270 days.

Since very few cases were admitted to the National Company Law Tribunal during FY21, IBBI data showed that only 12% of the ongoing cases were less than 90 days old after admission. Similarly, 9% of the ongoing cases in the corporate insolvency resolution process were between 90 and 270 days. The number of the unresolved cases is high even after IBBI had allowed exclusion of the lockdown period from the calculation of CIRP process last March.

The major cases pending at NCLT for approval includes Dewan Housing Finance Corporation (DHFL), Jet Airways, HCC’s subsidiary Lavasa. Reliance Industries (RIL) and Future Retail are also awaiting NCLT nod to hold meetings of their shareholders and creditors to consider and approve the proposed merger, after the Supreme Court had granted a go-ahead to the NCLT for its proceedings.

The latest IBBI data also showed that banks and other financial institutions have been able to recover 39.26% of the admitted amount so far.

They recovered a total of Rs 2 lakh crore from 348 cases of insolvencies, which were successfully resolved as on March 31, 2021. The total claims made by banks in these cases were Rs 5.16 lakh crore. In the January-March 2021 quarter, 29 insolvency cases were successfully resolved, with creditors recovering Rs 4,600 crore out of a total claim of Rs 17,389 crore made by bankers. The recovery rate during the quarter (Q4FY21) was a paltry 26.41%.

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