Lenders have recovered about half the defaulting advances of Rs 1.43 lakh crore stuck in 82 cases that have been resolved so far in the past two years, signalling that the Insolvency and Bankruptcy Code (IBC) has become increasingly effective in extricating funds from bad assets.
“IBC has successfully injected an element of fear into truant promoters,” said Manoj Kumar, partner, M&A-insolvency, Corporate Professionals. “IBC is yielding results, but it is still evolving and improving. Now, we should focus more on cutting down extra time being taken due to excessive litigation.”
Still, 275 cases have gone beyond the stipulated six-month period, show data compiled by Corporate Professionals, a Delhi-based company engaged in insolvencies. Out of top 12 bad loan cases, three have been resolved.
The law came into effect in December, 2016. The National Company Law Tribunal, the dedicated bankruptcy mechanism, has admitted 1,627 cases until February. More than a fifth of these cases have gone for liquidation, while the rest are either under insolvency resolution process or resolved.