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No big jump in bankruptcy admissions in June quarter

Of all the bankruptcy cases admitted so far in tribunals, 2,859 have been closed. ( Photo: Mint)Premium
Of all the bankruptcy cases admitted so far in tribunals, 2,859 have been closed. ( Photo: Mint)

  • Official data from the bankruptcy regulator Insolvency and Bankruptcy Board of India (IBBI) showed that the total cases admitted by the National Company Law Tribunal (NCLT) so far has gone up from 4,415 at the end of March to 4,541 at the end of June, barely a 3% increase

NEW DELHI : Admission of bankruptcy cases in the June quarter of FY22 remained low at 126 cases suggesting that the policy steps taken to avoid bankruptcies and the subdued market for distressed assets have prevented a surge in new cases after India lifted a temporary suspension of bankruptcy action towards the end of March. 

Official data from the bankruptcy regulator Insolvency and Bankruptcy Board of India (IBBI) showed that the total cases admitted by the National Company Law Tribunal (NCLT) so far has gone up from 4,415 at the end of March to 4,541 at the end of June, barely a 3% increase.  

The data offers relief to policy makers as a surge in fresh filings could have posed a challenge in managing the economy which is picking up momentum as the second wave of the pandemic abates.  

Of all the bankruptcy cases admitted so far in tribunals, 2,859 have been closed. Of these, 653 have been closed on appeal or review or settled, while 461 have been withdrawn. Another 1,349 cases have ended in orders for liquidation and 396 have ended in approval of resolution plans, IBBI said in its latest quarterly review posted on its website. 

The government had earlier raised the payment default threshold for bankruptcy filings from 1 lakh to 1 crore and offered a new alternate resolution scheme for small companies—called pre-pack scheme.

 

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