NEW DELHI: The insolvency regulation has helped in without delay and not directly addressing stressed belongings worth Rs 3 lakh crore within the final two years, a senior government reliable mentioned on Saturday.
More than 9,000 cases have come for redressal below the Insolvency and Bankruptcy Code (IBC), which became totally operational in December 2016.
Corporate affairs secretary Injeti Srinivas mentioned there has been a right away and indirect impact of the Code on stressed belongings worth as regards to Rs 3 lakh crore.
The estimated quantity, incorporated recoveries made thru answer plans and cases settled earlier than admission via the National Company Law Tribunal (NCLT) below the Code.
Over 3,500 cases had been resolved at pre-admission degree and led to claims worth Rs 1.2 lakh crore getting settled, he mentioned.
Under the Code, cases are taken up for answer most effective after approval from the NCLT.
"About 1,300 cases have been admitted and out of that, in about 400 cases, corporate insolvency resolution process has been completed... in 60 cases resolution plans have been approved, in 240 cases liquidation orders have been given, 126 cases are in appeal. These cases which have been resolved have led to recovery of Rs 71,000 crore as of now," Srinivas mentioned right here.
Taking into consideration cases which are at a mature degree of being addressed below the Code, he mentioned the quantity can be some other Rs 50,000 crore.
"If you factor that, you have around Rs 1.2 lakh crore coming through resolutions... (then adding up) pre-admission settlements, then it becomes Rs 2.4 lakh crore," Srinivas mentioned.
Further, the company affairs secretary noted that there are non-standard NPA accounts which were converted to standard accounts via virtue of debtors paying back the past due quantity and that figure can be around Rs 45,000 to 50,000 crore.
Together, the quantity can be as regards to Rs 3 lakh crore relating to stressed belongings which were without delay and not directly impacted via the Code, he added.
Srinivas also mentioned that much of the cash may well be concerning operational collectors.
Besides, he mentioned there are some bottlenecks with NCLT, insolvency answer professionals and Committee of Creditors (CoC).
"Today, I find that more than 3,200 cases pending for more than 90 days for admission... So who to blame? I will not blame NCLT but NCLT has to be more conscious about time (line)," he noted.
According to him, there are also instances of prolong in preparation of Expression of Interests (EoI) with admire to entities below the answer process in addition to in analysis of bids.
These are problems that need to be significantly regarded into via the insolvency answer professionals.
"CoC should really become more responsible, more empowered and more accountable. Ultimately, they are taking decision which is affecting public interest and national interest," Srinivas emphasized.
He mentioned that there will have to not be asymmetry of knowledge as the objective of answer process is maximisation of the price of belongings.
"I would urge upon the IBBI Chairperson to look at a system where information is available in the public domain transparently... so that it is not the prerogative of the few," he added.
Srinivas also instructed the idea of having a "pre-packed" model, like in some matured jurisdictions, for cases bobbing up earlier than the NCLT for approval below the Code.
"It has to be a completely transparent process. Literally, an insolvency practioner should be appointed by the board... It (pre-packed model) is little premature. I think we can look at it. It needs more assessment and research," he noted.
Insolvency and Bankruptcy Board of India (IBBI) chairperson M S Sahoo mentioned it used to be not really useful to exclusively rely at the Code for answer of all problems, adding that everybody has to play their roles below the Code.
Noting that the Code provides for principally a "cash flow approach and not a balance sheet approach", Srinivas mentioned there has been a tectonic trade within the behaviour of debtors and lenders.
"Today's estimation is (that) about Rs 10 lakh crore or more is caught up in NPA and could also be some other about Rs 8 lakh crore is caught up in DRTs (Debt Recovery Tribunals) and different puts...
"The amount of money caught up that may be released can give a push to economic growth," he mentioned.
The Code has been changed four occasions, including thru two ordinances, within the final two years.
They were speaking at a conference on 'Ensuring Efficiency in Resolution Process' right here.
More than 9,000 cases have come for redressal below the Insolvency and Bankruptcy Code (IBC), which became totally operational in December 2016.
Corporate affairs secretary Injeti Srinivas mentioned there has been a right away and indirect impact of the Code on stressed belongings worth as regards to Rs 3 lakh crore.
The estimated quantity, incorporated recoveries made thru answer plans and cases settled earlier than admission via the National Company Law Tribunal (NCLT) below the Code.
Over 3,500 cases had been resolved at pre-admission degree and led to claims worth Rs 1.2 lakh crore getting settled, he mentioned.
Under the Code, cases are taken up for answer most effective after approval from the NCLT.
"About 1,300 cases have been admitted and out of that, in about 400 cases, corporate insolvency resolution process has been completed... in 60 cases resolution plans have been approved, in 240 cases liquidation orders have been given, 126 cases are in appeal. These cases which have been resolved have led to recovery of Rs 71,000 crore as of now," Srinivas mentioned right here.
Taking into consideration cases which are at a mature degree of being addressed below the Code, he mentioned the quantity can be some other Rs 50,000 crore.
"If you factor that, you have around Rs 1.2 lakh crore coming through resolutions... (then adding up) pre-admission settlements, then it becomes Rs 2.4 lakh crore," Srinivas mentioned.
Further, the company affairs secretary noted that there are non-standard NPA accounts which were converted to standard accounts via virtue of debtors paying back the past due quantity and that figure can be around Rs 45,000 to 50,000 crore.
Together, the quantity can be as regards to Rs 3 lakh crore relating to stressed belongings which were without delay and not directly impacted via the Code, he added.
Srinivas also mentioned that much of the cash may well be concerning operational collectors.
Besides, he mentioned there are some bottlenecks with NCLT, insolvency answer professionals and Committee of Creditors (CoC).
"Today, I find that more than 3,200 cases pending for more than 90 days for admission... So who to blame? I will not blame NCLT but NCLT has to be more conscious about time (line)," he noted.
According to him, there are also instances of prolong in preparation of Expression of Interests (EoI) with admire to entities below the answer process in addition to in analysis of bids.
These are problems that need to be significantly regarded into via the insolvency answer professionals.
"CoC should really become more responsible, more empowered and more accountable. Ultimately, they are taking decision which is affecting public interest and national interest," Srinivas emphasized.
He mentioned that there will have to not be asymmetry of knowledge as the objective of answer process is maximisation of the price of belongings.
"I would urge upon the IBBI Chairperson to look at a system where information is available in the public domain transparently... so that it is not the prerogative of the few," he added.
Srinivas also instructed the idea of having a "pre-packed" model, like in some matured jurisdictions, for cases bobbing up earlier than the NCLT for approval below the Code.
"It has to be a completely transparent process. Literally, an insolvency practioner should be appointed by the board... It (pre-packed model) is little premature. I think we can look at it. It needs more assessment and research," he noted.
Insolvency and Bankruptcy Board of India (IBBI) chairperson M S Sahoo mentioned it used to be not really useful to exclusively rely at the Code for answer of all problems, adding that everybody has to play their roles below the Code.
Noting that the Code provides for principally a "cash flow approach and not a balance sheet approach", Srinivas mentioned there has been a tectonic trade within the behaviour of debtors and lenders.
"Today's estimation is (that) about Rs 10 lakh crore or more is caught up in NPA and could also be some other about Rs 8 lakh crore is caught up in DRTs (Debt Recovery Tribunals) and different puts...
"The amount of money caught up that may be released can give a push to economic growth," he mentioned.
The Code has been changed four occasions, including thru two ordinances, within the final two years.
They were speaking at a conference on 'Ensuring Efficiency in Resolution Process' right here.
'Insolvency law addressed Rs 3L cr stressed assets in 2 years'
!['Insolvency law addressed Rs 3L cr stressed assets in 2 years']()
Reviewed by Kailash
on
November 24, 2018
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