Economic Survey 2021: Recoveries Under IBC Highest Among All Debt Recovery Methods

Recovery of non-performing assets of scheduled commercial banks was highest under the Insolvency and Bankruptcy Code compared to other debt recovery methods, Economic Survey 2020-21 points out.

The survey said IBC recoveries were more than the combined recoveries each year under Lok Adalat, Debt Recovery Tribunal and the SARFAESI Act during 2016-17 to 2019-20. SARFAESI yielded highest recoveries for banks prior to the introduction of the insolvency code.

Statistics of resolution under the IBC reveal that:

• 308 corporate debtors, which owed more than Rs 4.99 lakh crore to lenders, have gone through resolution process as on December 2020.
• The realisable value of the assets of these corporate debtors was Rs 1.03 lakh crore. But creditors were able to recover Rs 1.99 lakh crore, which was more than 193% of the realisable value of these corporate debtors.
• Financial creditors recovered more than 43% as compared to their claims for all the years since the inception of IBC.

For the 12 large accounts under IBC, the realised amount as a percentage of admitted claims ranged between 17% to 100%, as per the data collected by the IBBI—lowest being for Alok Industries Ltd., and highest for Jaypee Infratech Ltd.