NEW DELHI : Admission of bankruptcy cases in the June quarter of fiscal 22 remained low at 126 cases, suggesting that policy measures taken to avoid bankruptcies and the sluggish market for distressed assets have prevented an increase in the number of new cases after India lifted a temporary stay on bankruptcy action in late March.
Official data from the bankruptcy regulator Insolvency and Bankruptcy Board of India (IBBI) showed that the total number of cases admitted by the National Company Law Tribunal (NCLT) to date has increased from 4,415 at the end of March to 4,541 at the end of June , barely a 3% increase.
The data offers relief to policymakers, as an increase in the number of new filings could have posed a challenge in managing the economy that is gathering momentum as the second wave of the pandemic subsides.
Of all the bankruptcy cases admitted to court so far, 2,859 have been cleared. Of these, 653 were filed for appeal or review or settled, while 461 were withdrawn. A further 1,349 cases resulted in liquidation orders and 396 in approval of resolution plans, the IBBI said in its latest quarterly review published on its website.
The government had previously raised the default threshold for bankruptcy filings by ??1 lakh to ??1 crore and came up with a new alternative resolution system for small businesses called the pre-pack system.
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