In the blog post, Jaitley said: “The early harvest through the IBC process has been extremely satisfactory.
Creditors realised as much as Rs 80,000 crore from 66 cases that found resolution under the Insolvency and Bankruptcy Code (IBC) so far, finance and corporate affairs minister Arun Jaitley has said, pitching the two-year-old law as a huge success of the government.
As per National Company Law Tribunal (NCLT) data, in 4,452 cases disposed at pre-admission stage, the amount settled was around `2.02 lakh crore, Jaitley said in a blog, indicating that the threat of invoking IBC by creditors was enough to make many defaulters pay up dues and settle the matter.
Some of the 12 large cases recommended by the RBI for resolution under the IBC such as Bhushan Power and Steel and Essar Steel are likely to be resolved this fiscal in which realisation is expected to be around `70,000 crore.
Increase in conversion of non-performing assets (NPAs) into standard accounts and a decline in new accounts falling in the NPA category show a definite improvement in the lending and borrowing behaviour, the minister said. So far, 1,322 cases have been admitted by the NCLT.
In the blog post, Jaitley said: “The early harvest through the IBC process has been extremely satisfactory. It has changed the debtor-creditor relationship. The creditor no longer chases the debtor. In fact, it is otherwise.”
By contrast, the various mechanisms adopted by the Congress government were utter failures, he said, adding that the only worthwhile mechanism—the SARFAESI Act–to address the bad loan issue earlier was brought in by the Vajpayee government.
According to a latest RBI report, the average recovery by banks based on the amount filed through the IBC was as much as 41.3% in FY18, against just 12.4% through other mechanisms such as SARFAESI Act, Debt Recovery Tribunals (DRT) and Lok Adalats.