Staff Reporter : The increasing number of pending corporate insolvency resolution processes under The Insolvency and Bankruptcy Code (IBC), exhibit the urgency to speed up the resolution processes. According to ICRA, reduction in timelines for completion of the resolution process should be of utmost priority to strengthen IBC.
The rating agency, ICRA, stated the number of pending corporate insolvency resolution processes under the IBC increased to 816 as on September 30, 2018 from 723 as on June 30, 2018. As per ICRA, while the IBC code, since its inception in December 2016 has been seen as a step in the right direction for the creditors. Abhishek Dafria, co-head, Corporate Ratings, ICRA said, “The number of corporate debtors admitted by the NCLT but are yet to be resolved through the corporate insolvency resolution process (CIRP) is growing steadily each quarter. The number of such corporate debtors increased to 816 as on September 30, 2018 from 723 as on June 30, 2018, despite the quarter having the highest closure of cases seen so far at 123.”
Dafria added of the 816 on-going CIRPs, about 30 per cent of them have already exceeded the 270-day timeline, was the maximum timeframe allowed for the resolution process to be completed. The agency also stated that around 20 per cent of the cases have crossed the 180-day timeline.“If one looks at the list of 12 large defaulting accounts identified by the Reserve Bank of India (RBI) in June 2017, only four cases have been resolved so far, while the other cases still remain unresolved even after more than 450 days have surpassed since being admitted by the NCLT,” Dafria pointed.