Half of the over 3,770 bankruptcy cases since the insolvency law came into force from December 1, 2016, were triggered by operational creditors and not banks, according to RBI’s Financial Stability Report.
Since December 2016, as many as 3,774 companies were sent to various bankruptcy tribunals, of which only 312 have been settled, 157 have been withdrawn and 2,170 are pending for resolution as of end-June, the Reserve Bank said in the report released on Friday.
“Operational creditors triggered as much as 49.65 per cent of the bankruptcy petitions, followed by 43.61 per cent by financial creditors and the remaining by corporate debtors,” the report said.
As regards the status of applications, little over a third or 34 per cent of the ongoing cases were delayed beyond 270 days. As much as 3,800 cases had commenced by the end of March 2020.
“Of the total cases 312 were closed on appeal/review / settled, 157 were withdrawn under section 12A, 221 were closed by resolution, 914 were closed by liquidation and 2170 are under pendency,” the report said.
Of the pending cases, 738 have are beyond 270 days, 494 are delayed by 180-270 days, 561 are beyond the 90-180 days bracket and 377 are delayed by 90 days.
There were 55 cases where corporate debtors were non-functional but had resolution values higher than the liquidation values.