IBBI addresses CIRP delays, proposes reforms to streamline process

The Insolvency and Bankruptcy Board of India (IBBI) is trying to address delays in the Corporate Insolvency Resolution Process (CIRP) across four distinct phases—before admission, during admission, during resolution, and approval of the resolution, according to a senior board official.

“We are trying to find out or analyze the cause of delay at various levels, and are trying to speed up the processes. IBBI is looking to address the delays by categorizing them into four parts,” said Ravi Mital, Chairman of IBBI speaking at the 8th National Summit of Assocham on Saturday.

Delays in the CIRP have posed significant challenges to the resolution process. Ashwini Kumar Tewari, MD of State Bank of India (SBI), emphasised the importance of measuring the time taken at each stage to pinpoint where the most significant delays occur, stating, “If we scrutinise the time spent in various phases, it will become evident where the most significant bottlenecks lie.”

To address these concerns, the IBBI recently proposed four changes to CIRP regulations aimed at reducing delays, as outlined in a consultation paper.

Bahram Vakil, Chairman of Assocham National Council for IBC and Valuation, praised IBBI’s efforts and highlighted its cost-effectiveness compared to global standards. He anticipates that the new amendments to the Insolvency and Bankruptcy Code (IBC) will be considered during the upcoming winter session of Parliament, a matter originally scheduled for the last Parliament session.

Highlighting IBBI’s accomplishments, Mital noted that nearly 20,000 to 25,000 cases had been withdrawn, even before admission, totalling around nine trillion. When combined with the three trillion obtained through resolutions, IBC has facilitated the return of approximately 12 trillion into the banking system, according to the press release.