Sage-Tips

Has IBC been successful?

Recovery through the IBC has been higher in FY20, according to the RBI, at 46 per cent, compared with SARFAESI, DRTs or Lok Adalat.

How many cases resolved under IBC?

As of September 30, a total of 4,708 CIRPs were initiated under the IBC. “The realisable value of 421 cases which were resolved through a resolution plan as on 30th September, 2021 is Rs 2.55 lakh crore for all creditors, including financial creditors. The liquidation value of these companies was Rs 1.48 lakh crore.

What is the maximum time period of resolution by Nclt under IBC?

On receipt of such application, Adjudicating Authority (NCLT) can grant only one extension upto maximum 90 days – section 12(3) of Insolvency Code, 2016. Mandatory period for completion of CIRP is 330 days even including time of appeal, stay etc.

What is the minimum default value for applicability of IBC Act?

The amendment of the minimum threshold of default from 1 (One Lakh) to 1 (One Crore) rupees under Section 4(1) of the Insolvency and Bankruptcy Code, 2016 (‘IBC’ or ‘2016 Code’) made by the Government of India vide Notification F.

Is IBC 2016 effective?

The Code was passed by parliament in May 2016 and became effective in December 2016. Section 243 of this Code repeals the Presidency Towns Insolvency Act, 1909 and Provincial Insolvency Act, 1920.

How much money has been recovered through IBC?

The Insolvency and Bankruptcy Code (IBC) has since 2016 helped recover Rs 2.5 trillion from bad assets compared to admitted claims of Rs 7 trillion, thus clocking a recovery rate of 36 per cent as of June 2021, said a report by rating agency CRISIL.

How much money recovered through IBC?

Steps taken by the government such as enacting the Insolvency & Bankruptcy Code (IBC) have helped banks recover around Rs 5.5 lakh crore of bad debt. Out of this, close to Rs 1 lakh crore was recovered from accounts that were technically written off.

Can Cirp be extended beyond 330 days?

As per Section 12 of the IBC, the CIRP is required to be concluded within a period of 180 days which can be further extended to 90 days. The IBC was amended in 2019 to require that CIRP must be completed within 330 days including any extension and time taken in legal proceedings of the process.

What is the last date for submission of proof of claims under IBC 2016?

But as per regulation 12(2) the Creditors who fails the submit the claims with proof within 14 days can submit their claims within 90 days from the Insolvency Commencement date. The regulation 12(2) was amended.

Which among the following is not entitled to initiate corporate insolvency resolution process?

A Financial service provider cannot initiate CIRP nor can any CIRP be initiated against it. B Financial service provider can initiate CIRP and also CIRP can be initiated against it.

Who can initiate corporate insolvency resolution process?

Where any corporate debtor commits a default, a financial creditor, an operational creditor or the corporate debtor itself may initiate corporate insolvency resolution process in respect of such corporate debtor in the manner as provided under this Chapter (Chapter II of part II) – section 6 of Insolvency Code, 2016.

What is the status of IBC cases during covid-19?

On June 5, 2020, the central government issued an amendment to the Code instituting a moratorium on IBC cases based on defaults during the pandemic. That moratorium was extended twice and formally ended in March of this year, just before the second wave of Covid-19 cases ground life in the country to a halt again.

How IBC is forcing behavioural changes in the borrowers?

IBC is forcing behavioural changes in the borrowers by way of instilling financial discipline and also much- needed accountability, primarily driven by fear of losing control of companies, leading to the resolution of higher number of cases at the pre-admission stage.

What is the IBC threshold for insolvency in India?

Regarding the IBC in particular, shortly after the strict lockdown of March 2020, the IBBI increased the threshold for (pre-pandemic) defaults that made debtors eligible for insolvency from Rs 1 lakh (roughly $1,500) to Rs 1 crore (roughly $150,000).

What is the International Bankruptcy Code (IBC)?

The IBC was generally designed and enacted to help promote the development of credit markets in the country and to improve the environment for foreign investors. But there was also a pressing motivation for the IBC: to help resolve a crisis with non-performing assets in the country’s banking system.