Under IBC credit discipline 30k cases were settled
The Statesman | 11 May 2025
In IBC, a noticeable improvement in credit discipline, with more than 30,000 cases settled prior to admission, covering underlying defaults worth Rs 13.78 lakh crore till December 2024, said Jithesh John, IES, executive director, IBBI at the 8th Annual Conference on Insolvency & Bankruptcy Code (IBC) Conclave, organised by CII Eastern Region at Kolkata, today.
He asserted that the RBI’s trend and progress of Banking in India for the year 2023-24 report highlights that out of the Rs 96,000 crore recovered by scheduled commercial banks through various channels, Rs 46,000 crore have been recovered through IBC thereby underscoring its significance.
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Mr John stated that a total of 1,194 CIRPs have ended in resolution with different degrees of recovery till March 2025. The creditors have realised Rs 3.89 lakh crore under the resolution plans. While this may be about 32 per cent of the claims, the creditors have recovered around 170.02 per cent of the liquidation value and around 93.36 per cent of the fair value. He said that it is interesting to note that about 40 per cent of the CIRPs, which yielded resolution plans, were defunct companies that were not going concerns. This is the real success of the IBC Code that even defunct companies have been made operational through this process leading to job creation in the market. In these cases, the claimants have realised 150.33 per cent of liquidation value and 18.96 per cent of their admitted claims.
Mr Jitesh John further highlighted that in a comprehensive research study conducted by the Indian Institute of Management Ahmedabad (IIMA) to assess the effectiveness of the resolution process under IBC in India, creditors have, on average, realised 32 per cent of admitted claims and 168 per cent of liquidation value in cases resolved. Average total assets of resolved firms increased by about 50 per cent, post-resolution, coupled with a 130 per cent increase in CAPEX. The aggregate market valuation of all resolved firms increased from around Rs 2 lakh crore to Rs 6 lakh crore post-resolution.
At the conclave, Arun Kumar Yadav, chief general manager – SARG, State Bank of India, talked about how to increase the speed of admission of the cases. The technology like AI can be used to make the evaluation to speed up the cases.
Samir Agarwal, co-chairman, CII ER banking & financial services subcommittee & director, Indcap Advisors Pvt Ltd shared that one of the key pillars of a strong and prosperous India is indeed a resilient, responsive, and effective insolvency framework. He said the financial year 2023–24 witnessed remarkable progress in the implementation of the code. A record 269 resolution plans were approved by the NCLT, compared to 189 in the previous year, which is a 42 per cent increase.
There were plenary sessions on “Recent Supreme Court Rulings: Castigating Role of RP, CoC, SRA, Adjudicating Authority – “A wake up call”, and “Reimagining the IBC: Innovative Approaches to Resolution and Liquidation”.