Ravi Mittal, Chairperson of the Indian Disabled Board (IBBI) said on Thursday that India’s companies still have to learn the use of debt -ridden disability and insolvency (IBC). He said that if the companies are facing whatever problems are facing regulatory obstacles, they are willing to study them.
Speaking at an event organized by the Associated Chambers of Commerce and Industry of India (Assocham), Mittal said, “In most cases in India, lenders go for the insolvency process. It would have been better that companies come out, because it will be the time when the price declining is the lowest.
Comparing the insolvency data with developed countries, the IBBI chief said that about 63,000 of the 63,000 insolvency applications in the US have voluntarily made themselves. He said that this means that insolvency is not an adverse process.
According to IBBI data, 3,706 insolvency application initiatives by September 2024 have been made by financial lenders, 3,812 operational credits and only 480 applications have been made by corporate lenders (companies) themselves.
IBBI data shows that about 80 percent of the corporate insolvency resolution process (CIRP) is such that the lapse is less than Rs 1 crore. In this, the initiative of the application has been done by the operational lenders. IBBI data shows that the share of CIRP initiative by corporate borrowers or companies has decreased over time. Mittal said that more than Rs 11 lakh crore cases were already withdrawn from the IBC with the withdrawal of the case before the entry level, which shows that the IBC has changed the relationship between the borrower and the lender.
He said, ‘Fear of law is better than using it. Today people do not want to miss. ‘ Mittal said that in the last 8 years, the IBC has given companies the best mechanism to get out and returned Rs 3.6 lakh crore to the lenders, making banks capable of giving more loans.