Insolvency resolution improves during Covid period: CARE Ratings
ECONOMY & POLICY

Insolvency resolution improves during Covid period: CARE Ratings

Insolvency cases have steadily grown over the past four years, and the trend continued over the first three quarters of the Covid-stricken FY 2020-21. A CARE Ratings report does the math sector-wise and quarter-wise, numbers filed and resolved. The report indicates that both the numbers have increased over FY 2020-21.

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 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 fully and even after that the business and economy may take some time to return to normal.

To address this, several IBC measures were announced by the government in May 2020 including 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 25 March 2020. However, such suspension for filing of applications for initiation of corporate insolvency resolution process has ended on 24 March 2021.

Among the cases, 439 belonged to the construction sector and 816 to the real estate sector.

A CARE Ratings report says that of the total 4,139 cases admitted into Corporate Insolvency Resolution Processes (CIRPs) at the end of December 2020, 41% of the cases continue to remain in the resolution process against 57% as at the end of March 2020.

Read the full report here.

Image source

Insolvency cases have steadily grown over the past four years, and the trend continued over the first three quarters of the Covid-stricken FY 2020-21. A CARE Ratings report does the math sector-wise and quarter-wise, numbers filed and resolved. The report indicates that both the numbers have increased over FY 2020-21. 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 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 fully and even after that the business and economy may take some time to return to normal. To address this, several IBC measures were announced by the government in May 2020 including 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 25 March 2020. However, such suspension for filing of applications for initiation of corporate insolvency resolution process has ended on 24 March 2021. Among the cases, 439 belonged to the construction sector and 816 to the real estate sector. A CARE Ratings report says that of the total 4,139 cases admitted into Corporate Insolvency Resolution Processes (CIRPs) at the end of December 2020, 41% of the cases continue to remain in the resolution process against 57% as at the end of March 2020. Read the full report here.Image source

Related Stories

Hi There!

Now get regular updates from CW Magazine on WhatsApp!

Click on link below, message us with a simple hi, and SAVE our number

You will have subscribed to our Construction News on Whatsapp! Enjoy

+91 86574 75330

Reach out to us

Call us at +91 8108603000 or

Schedule a Call Back