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IBC in stress: Survival depends on commitment to its core principles
M S Sahoo Ashish Makhija
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The Indian Parliament in 2016 enacted the Insolvency and Bankruptcy Code (IBC) to address the country's persistent challenges of financial stress and managing bad debts, with the overarching objective of driving economic growth. In its initial years, the IBC benefited from rare institutional alignment. The legislature amended the code six times in the first five years to address implementation challenges and respond to the evolving economic environment. With alacrity, the executive issued the rules and regulations, established the Insolvency and Bankruptcy Board of India (IBBI) and National Company Law Tribunal (NCLT), accredited insolvency professionals, and built the supporting ecosystem. The
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Time of India
27 minutes ago
- Time of India
IBC helped resolve bad loans of over Rs 12 lakh crore in 9 years, but resolution time doubled: CRISIL
The Insolvency and Bankruptcy Code (IBC), introduced nine years ago, has played a crucial role in resolving stressed debt in India. According to an analysis by CRISIL Market Intelligence, the IBC has directly resolved about Rs 12 lakh crore worth of debt through nearly 1,200 cases of stressed borrowers. Explore courses from Top Institutes in Please select course: Select a Course Category CXO Product Management Operations Management Public Policy Design Thinking Leadership Data Science Data Analytics Finance others Degree MBA PGDM Others Technology Project Management healthcare Cybersecurity MCA Management Artificial Intelligence Data Science Digital Marketing Healthcare Skills you'll gain: Digital Strategy Development Expertise Emerging Technologies & Digital Trends Data-driven Decision Making Leadership in the Digital Age Duration: 40 Weeks Indian School of Business ISB Chief Digital Officer Starts on Jun 30, 2024 Get Details Skills you'll gain: Customer-Centricity & Brand Strategy Product Marketing, Distribution, & Analytics Digital Strategies & Innovation Skills Leadership Insights & AI Integration Expertise Duration: 10 Months IIM Kozhikode IIMK Chief Marketing and Growth Officer Starts on Apr 7, 2024 Get Details Skills you'll gain: Operations Strategy for Business Excellence Organizational Transformation Corporate Communication & Crisis Management Capstone Project Presentation Duration: 11 Months IIM Lucknow Chief Operations Officer Programme Starts on Jun 30, 2024 Get Details Skills you'll gain: Technology Strategy & Innovation Emerging Technologies & Digital Transformation Leadership in Technology Management Cybersecurity & Risk Management Duration: 24 Weeks Indian School of Business ISB Chief Technology Officer Starts on Jun 28, 2024 Get Details It stated "Insolvency and Bankruptcy Code (IBC) nine years ago has enabled the direct resolution of approximately Rs 12 lakh crore of debt." by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Even Beautiful Women Have Their 'Oops' Moments Read More Undo The report highlighted that the impact of IBC goes beyond just the cases admitted by the National Company Law Tribunal (NCLT). In addition to resolution under IBC, the report pointed out that nearly 30,000 cases involving around Rs 14 lakh crore of debt were settled even before formal admission to the NCLT. Live Events This showed that the IBC has acted as a strong deterrent, pushing borrowers to settle dues early to avoid insolvency proceedings. The IBC has brought a major shift in the approach to debt resolution in India, moving from a debtor-in-control system to a creditor-in-control framework. This distinguishes it from earlier systems like the Debt Recovery Tribunal (DRT), Lok Adalat, and the SARFAESI Act. Since 2016, total resolved debt through various mechanisms has touched Rs 48 lakh crore. Of this, the IBC has shown the highest recovery rate of around 30-35 per cent, compared to 22 per cent for SARFAESI, 7 per cent for DRT, and 3 per cent for Lok Adalat. The flexibility under IBC to change management and restructure debt has also helped, especially in reviving viable businesses. In the past three years alone, about 60 per cent of resolution approvals were completed, although they accounted for only 40 per cent of total debt. However, the report also noted some challenges, particularly the delay in resolution timelines. The average time to resolve a case under IBC has increased to 713 days, more than double the prescribed 330 day limit. The delay is mostly due to procedural bottlenecks and cross-litigations. To improve this, the Insolvency and Bankruptcy Board of India (IBBI) has increased NCLT bench strength, allowed online submissions, and permitted part-wise resolution of debt. Overall, while IBC has become India's primary tool for resolving stressed debt, the report believed the real test will be how effective the recent amendments are in ensuring faster and more efficient outcomes in the future.


Hans India
7 hours ago
- Hans India
Rs 26-trn debt resolved via IBC
Mumbai: Nine years after the launch of the Insolvency and Bankruptcy Code (IBC), India has managed to resolve debt worth more than Rs26 lakh crore, either directly or indirectly, a new report said on Tuesday. Out of the total amount, around Rs12 lakh crore of debt was resolved through about 1,200 cases of stressed borrowers after they were admitted to the National Company Law Tribunal (NCLT), as per data compiled by Crisil Ratings. However, a bigger impact of the IBC has been in creating fear among defaulting borrowers, which helped settle nearly 30,000 cases involving Rs14 lakh crore of debt even before these cases could be formally admitted by the NCLT. Since its launch in 2016, the IBC has replaced the earlier debtor-friendly system with a creditor-in-control approach. This major shift has made IBC more successful compared to earlier debt recovery methods like the Debt Recovery Tribunal (DRT), Lok Adalats, and SARFAESI. Data shows that the average recovery under the IBC has been 30-35 per cent, which is much higher than 22 per cent under SARFAESI, 7 per cent under DRT, and just 3 per cent through Lok Adalats.


Deccan Herald
9 hours ago
- Deccan Herald
IBC helps resolve Rs 26 lakh cr worth of debt in 9 years: Crisil
In the past nine years, the IBC has enabled direct resolution of 1,200 cases of stressed borrowers involving debt of Rs 12 lakh crore.