Creditors recovered ₹3.36 trillion under IBC: Nirmala Sitharaman

  • The BIFR regime achieved debt resolution of fewer than 3,500 cases in the nearly 30 years since its inception in 1987 whereas IBC has rescued 3,171 distressed companies between 2016 and March 2024 and helped shut down unviable businesses, the Union finance minister said in a social media post.

Gireesh Chandra Prasad
First Published30 May 2024
Nirmala Sitharaman, Union finance minister.
Nirmala Sitharaman, Union finance minister.(PTI)

New Delhi: Creditors have recovered 3.36 trillion owed by defaulting corporations under the Insolvency and Bankruptcy Code since 2016 when the bankruptcy reform was introduced, finance and corporate affairs minister Nirmala Sitharaman said on Thursday.

Also read |  Fund transfer norms led to savings, says FM

The minister said in a social media post that the recovery, a significant improvement over the previous regime—the Board for Industrial and Financial Reconstruction (BIFR)—represents around a third of what was claimed by creditors and 162% of the liquidation value of the assets. 

IBC better than BIFR

The BIFR regime achieved debt resolution of fewer than 3,500 cases in the nearly 30 years since its inception in 1987 whereas IBC has rescued 3,171 distressed companies between 2016 and March 2024 and helped shut down unviable businesses, the minister said in the post. 

Also read |  India needs greater sophistication in manufacturing, says FM Nirmala Sitharaman

IBC is counted as one of the transformative reforms of the first term of the NDA administration although the work on bankruptcy reform had started before.  It has helped in tackling a major development challenge for the government—the twin balance sheet problem – when banks are stressed and firms are overleveraged, due to liberal lending practices meant to boost economic growth after the global financial crisis of 2008-09.

Trust and transparency built

IBC has built trust and transparency in the financial system and as per an RBI report, accounted far for the greatest recovery among different recovery channels in FY23, the minister said. After the reform, the gross non-performing assets ratio of banks dipped to a multi-year low of 3% and the net non-performing assets ratio (which excludes the provisions set aside for covering potential losses) to 0.7% as of December 2023, the minister said.

Also read | Centre’s capex cut logistics cost for businesses: Sitharaman

“IBC has brought a paradigm shift in the debtor-creditor relationship and provides a streamlined, one-stop solution for resolving insolvencies,” Sitharaman said, referring to a World Bank report in 2019 which acknowledged an increase in the recovery rate under the new regime.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.MoreLess
HomeNewsIndiaCreditors recovered ₹3.36 trillion under IBC: Nirmala Sitharaman

Most Active Stocks

Bharat Electronics

302.85
09:59 AM | 13 JUN 2024
12.3 (4.23%)

Tata Steel

182.40
09:59 AM | 13 JUN 2024
0.15 (0.08%)

GAIL India

219.85
09:59 AM | 13 JUN 2024
2.9 (1.34%)

Zee Entertainment Enterprises

164.45
09:59 AM | 13 JUN 2024
-2.4 (-1.44%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Elgi Equipments

660.05
09:54 AM | 13 JUN 2024
56.3 (9.33%)

Aegis Logis

837.25
09:54 AM | 13 JUN 2024
70.8 (9.24%)

Praj Industries

692.00
09:54 AM | 13 JUN 2024
57.7 (9.1%)

Usha Martin

412.55
09:54 AM | 13 JUN 2024
34.4 (9.1%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    73,441.00-219.00
    Chennai
    73,370.00139.00
    Delhi
    73,155.00353.00
    Kolkata
    72,797.00-577.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    99.84/L0.00
    Chennai
    100.75/L0.00
    Kolkata
    103.94/L0.00
    New Delhi
    94.72/L0.00
    OPEN IN APP
    HomeMarketsPremiumInstant LoanGet App