IBC led to recovery of just 10% of defaulted loans in non-

The insolvency and bankruptcy law has resulted in recovery of just 10 per cent of defaulted loans in case of companies other than the seven big ones referred for resolution, senior Congress leader Jairam Ramesh said in Rajya Sabha on Thursday.

Speaking on a bill to further amend the Insolvency and Bankruptcy Code to give protection to new owners of a loan defaulter company against prosecution for misdeeds of previous owners, Ramesh said of the 970 cases referred to IBC, 780 have been liquidated, indicating a mortality rate of 80 per cent.

The first objective of the IBC was to save companies but with a mortality rate of 80 per cent it is not life saving, he said.

Ramesh said against admitted claims of Rs 3.51 lakh crore, Rs 1.50 lakh crore has been recovered by way of auctioning defaulting firms to new buyers.

The recovery was 43 per cent, implying that banks took a hair cut of 57 per cent on their loans, he said.

If the big seven firms -- Electrosteel, Bhushan Steel, Monnet Ispat, Essar Steel, Alok Industries, Bhushan Power & Steel and Jyoti Structures are excluded then the total recovery is 10 per cent, he said, "This means banks took hair cut of 90 per cent."