Debt resolution under IBC process: Banks take 47% haircut in RBI first list

Lack of capacity at the NCLTs is turning out to be a big concern for the investors as well as lenders

With debt resolution under the Insolvency and Bankruptcy Code process picking up, banks have seen Rs 550 billion of recoveries at an average 47% haircut in the Reserve Bank of India’s (RBI) first list announced in June 2017. The pick-up in recoveries to 4% of loans in June quarter was also primarily on account of IBC-led resolutions.  According to Credit Suisse, though the IBC process is time-bound (180 days extendable to 270 days), many of the larger cases have witnessed delays. 

However, the usual 300-day timeline is still significantly superior to the other court-driven processes (DRT, SARFAESI) where it takes even