Centre seeks capacity for 1k IBC cases

New Delhi, Oct 2, 2023

The government on Sunday said that the system needs to be geared up to deal with around 1,000 insolvency cases annually even as the Insolvency & Bankruptcy Board of India (IBBI) sounded upbeat on the recent pick up in resolutions, which are expected to be close to 300 this year.

"In the first five years, around 500 resolutions have happened. Last year, the adjudicating authorities made 180 resolutions, an 80% increase over the average of 100. This is commendable. Last year, the direct recovery was more than Rs 51,000 crore, more than the recovery under all other means combined. This year, things are even better. Till august, around 135 resolutions have already happened. We will end this year with 300 resolutions," IBBI chairman Ravi Mittal said at the agency's annual day event.

While urging resolution professionals to improve their functioning to keep pace with the adjudicating authority, Mittal said that IBBI would be issuing consultation papers to further speed up the process.

Addressing the event later, ministry of corporate affairs secretary Manoj Govil said that the government is working on a set of amendments to the Insolvency and Bankruptcy Code, and urged all stakeholders to focus on improving the processes, pointing to delays.

He said that just the admission of cases was taking 600 days. While a 14-day deadline may not be easily implementable, Govil suggested that cases should be admitted within two-three months and even the resolution work should be speeded up.

"We are steadily improving the pace of resolutions... 180 cases last year, this year, 300. Is that sufficient? Would that be able to unclog the pipeline? We did some studies. Around 5,000 new cases are filed every year, although it depends on the economic climate and how successful we are in resolving these new cases," he said, adding that there needs to be a capacity to deal with 1,000 cases annually, budgeting for withdrawals and other action.

[The Times of India]