According to a Care Ratings’ report, the Insolvency and Bankruptcy Board of India (IIBI) has undertaken several measures in the wake of Covid-19 pandemic across India to help contain the impact of spread of the disease. The economic fallout due to the ongoing Covid 19 pandemic has led to significant financial stress for borrowers across the board, this may remain a concern for some time as there is no clarity as to when Covid 19 will subside and even after that how much time the business and economy would require to return to normal. To address this, several IBC measures were announced by the government on May 17, 2020 which included increasing the minimum amount of default for initiation of corporate insolvency resolution process to Rs. 1 crore and suspending filing of applications for initiation of corporate insolvency resolution process in respect of the defaults arising during the period of one year beginning from March 25, 2020. However, such suspension for filing of applications for initiation of corporate insolvency resolution process ended on March 24, 2021, but a significant jump in IBC cases is unlikely in the near future as there was a six-month moratorium for stressed borrowers followed by an OTR (one-time restructuring) and government emergency credit guarantee scheme. The number of cases admitted for Corporate Insolvency Resolution Processes (CIRPs) over the last 16 quarters had increased significantly, and had been generally increasing every quarter, with a major portion of these cases being admitted over the last ten quarters, thereby highlighting the rising acceptance of IBC as an effective debt resolution mechanism. However, the cases admitted slowed down in FY21 (499 cases) compared with 1,978 cases admitted in FY20. The March-end quarter witnessed a drop of around 47% compared with the previous year. This can be attributed to the suspension of fresh bankruptcy proceedings for Covid-19 defaults which ended on March 24, 2021, says the report. Image source Read the full report here.