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Insolvency law helped resolve Rs 3 lakh crore bad debts in 2 years: Srinivas
New Delhi, Nov 24 (IANS) The two-year-old Insolvency and Bankruptcy Code (IBC) has directly and indirectly helped resolve stressed assets worth Rs 3 lakh crore, Corporate Affairs Secretary Injeti Srinivas said on Saturday.
“So, that takes you close to Rs 3 lakh crore, direct and indirect impact of the IBC, which is a huge amount,” he said after adding stressed assets resolved on its own and through IBC.
He was speaking at an event hosted by industry body FICCI.
Srinivas said the insolvency law has disposed of about 50 per cent (4,400 to be exact) of the 9,000-odd cases that it received in the last two years, including those transferred from the Board for Industrial and Financial Reconstruction (BIFR).
More than 85 per cent of the resolved cases were disposed of prior to admission in National Company Law Tribunal (NCLT) on the joint request of debtor and creditor, after being brought to the IBC by the financial or operational creditor.
“Our figures show us that more than 3,500 cases got resolved pre-admission and it has resulted in claims amounting to Rs 1.2 lakh crore getting settled,” he said.
Of the 1,300 odd cases that were admitted, Corporate Insolvency Resolution Process (CIRP) for about 400 cases is complete, resolution plans for 60 cases approved, and liquidation order passed for 240 cases.
As many as 126 cases are in appeal, he said.
“These cases which have been resolved have led to recovery of about Rs 71,000 crore. If you add cases which are at mature stage, then it will come to another Rs 50,000 crore… almost Rs 1.2 lakh crore coming from resolutions. Add up the pre-admission claim settlement, it becomes Rs 2.4 lakh crore,” he said.
Further, Srinivas said Rs 45,000 crore to Rs 50,000 crore non-standard NPA accounts have been converted into standard accounts by virtue of the borrowers paying back the overdue amount taking, the total close to Rs 3 lakh crore.
Though much of the resolution amount is owed to operational creditors and not to banks, the resolved bad debt is one-third of the gross NPA of Indian banks, which is Rs 10 lakh crore.
“The Rs 3 lakh crore, direct and indirect impact of the IBC, is one-third of Rs 10 lakh crore in a way, but much of this money may not be owed to banks alone. The Rs 1.2 lakh crore which got settled to a considerable extent would be pertaining to the operational creditors.”
Operational debt consists of liabilities that a firm incurs through its primary activities. The most common operational debts are vendor payables, pension liabilities, salaries and taxes.
Srinivas said compared to the 26 per cent recovery in BIFR, the recovery through the IBC has more than doubled, including 100 per cent in some cases depending on the enterprise value, which gets preserved due to the time-bound reference under the new law.
Speaking at the conference on ‘Ensuring Efficiency in Resolution Process’, Insolvency and Bankruptcy Board of India (IBBI) Chairman M. S. Sahoo said the IBC was not a panacea for resolution and that the code will require a couple of years to gain maturity.
IBC, he said, is like an orchestra and wants everyone to play. The Committee of Creditors (CoC) has to play its due role, attend meetings and take business decisions that are viable and add value.
–IANS
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Dr. Abhishek Verma Dedicates a Shelter in Memory of His Mother, Veena Verma, at KGMU; Inaugurated by Daughter Nicolle Verma
World-renowned business tycoon Dr. Abhishek Verma has supported Foodman Vishal Singh’s Hunger-Free World mission. In memory of his mother, Late Veena Verma, who was a 3 term Rajya Sabha MP.
Dr. Verma dedicated a state-of-the-art free permanent shelter for the attendants of patients at KGMU Medical University, Lucknow, under the aegis of Vijay Shree Foundation. His daughter, Nicolle Verma, inaugurated the shelter.
During the event, Foodman Vishal Singh honored Nicolle Verma by presenting her with a memento. Mrs. Nidhi Sharma and Avantika Yadav, associated with the organization, welcomed her with garlands. Following this, Nicolle Verma distributed essential items to the attendants and also handed out fruits. She became emotional remembering her grandmother on her birth anniversary.
On this occasion, she also inaugurated the “Veena Verma Sevalaya” in memory of her grandmother, Veena Verma, to serve the attendants. She expressed, “I feel proud that my family is engaged in nation-building as well as social service. Today, in collaboration with Vijay Shree Foundation founder Foodman Vishal Singh Ji, I feel immensely proud to dedicate this shelter for the poor, helpless, and needy attendants of patients battling serious illnesses like cancer. I am honored to be associated with the Hunger-Free World Mission for humanity.”
Inspired by the continuous humanitarian service provided by Vijay Shree Foundation over the past 17 years, Nicolle Verma donated 10 lakh rupees to support the cause. The purpose of this donation is to ensure that services continue for the needy attendants of patients suffering from severe illnesses in hospitals, as facilitated by Foodman Vishal Singh.
It is noteworthy that Dr. Abhishek Verma’s family has a legacy of public and philanthropic service. They are helping millions to carry forward the values and service work of their parents. On the occasion of his mother’s birth anniversary, Dr. Abhishek Verma dedicated this state-of-the-art permanent shelter at Lucknow Medical College to serve the attendants of patients through the Vijay Shree Foundation.
Supporting Foodman Vishal Singh’s Hunger-Free World mission, Dr. Abhishek Verma assured that he would continually support keeping this flame of humanity alive. He also promised to assist in providing medicines to the helpless patients.
Continuing her grandmother’s legacy of service, Nicolle Verma personally served food to the needy patients and attendants. She said, “It is our good fortune to have received the joy of doing this noble work today through Foodman Vishal Singh. I have taken another step forward in carrying my family’s values and cooperation by joining hands with the Vijay Shree Foundation. My father taught me to serve and help the needy, and I feel happy when I bring a smile to someone’s face.”
On the birth anniversary of the late Veena Verma, the event organizer, Vijay Shree Foundation founder Foodman Vishal Singh, said, “We feel proud and happy that Dr. Abhishek Verma, a globally renowned business tycoon, has extended his support to uplift our country from the hunger index. Today, on his mother’s birth anniversary, he inaugurated a state-of-the-art permanent shelter at Lucknow Medical College, which will always be helpful for the needy attendants of patients. It is a pleasure for me and the organization to receive the affection of Mr. Verma.”
The event was attended by General Manager Verma Family Office Hemant Garg, Sonu Rajput, and the organization’s volunteers, including Sandeep Singh, Parmeshwar Ji, Prashant Rao Gautam, Balram Singh, Ramesh Chaudhary, Suman, Jeetu, Anil, Suraj, Vinay, Manish Bhadauria, Manas Mehrotra, Vivek, Apurv, Happy, and others.
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