Insolvency board revamps reporting of bankruptcy resolution process to ease compliance burden

Mint

28-05-2025

New Delhi: Insolvency and Bankruptcy Board of India (IBBI) has revamped the reporting and monitoring of corporate bankruptcy proceedings to cut red tape, enable auto-population of electronic forms and ease compliance burden, showed an official order.
IBBI has been taking steps to improve the efficiency of debt resolution, cut down delays, and seamlessly make information about the resolution process available to stakeholders. The government is also building a tech platform that will connect all stakeholders involved in bankruptcy resolution, including tribunals, creditors, and policymakers.
The new protocols brought out on Tuesday reduce the number of forms to be filled from nine to five and will be applicable from 1 June, but there will be no penalty in the September quarter for any default in timely filing as part of a transition arrangement, the order said.
As part of the changes, a new standardised monthly reporting cycle replaces the existing event-based reporting dates. In the new regime, details of various debt resolution proceedings have to be filed on or before the tenth day of the subsequent month, except in the case of approval of a resolution plan or liquidation by the tribunal, which has to be reported within seven days of such a decision.
IBBI said the new forms will be made available on its website on 1 June. No penalty will be levied on delayed filing of forms, if any, during the September quarter in order to facilitate the professionals handling the bankruptcy case to familiarise themselves with the new forms and to resolve any technical issues, the regulator said.
The set of forms have to be filed on an electronic platform to be hosted on the regulator's website. The consolidation of forms has been achieved by removing duplications, streamlining data requirements, and leveraging technology for auto-population of information already available on portal, IBBI stated.
Rating agency Icra Ltd. said on Wednesday that since the introduction of the Insolvency and Bankruptcy Code (IBC) in 2016, 8,308 corporations have been admitted in tribunals for debt resolution, of which 61% have been resolved either through a successful resolution plan or by withdrawal of the case or by liquidation by end of March 2025.
The IBC, despite its shortcomings, continues to deliver better realisations for creditors over other recovery modes, the Icra report quoted Manushree Saggar, senior vice president and group head, Structured Finance Ratings.
'Historically, resolutions from the IBC have been plagued by long resolution timeframes, high share of liquidations and sizeable haircuts. While FY25 was a positive year with improved realisations, the overall resolution time remains a cause for concern,' said Saggar.
Almost 78% of the ongoing corporate insolvency resolution cases have exceeded 270 days, post admission by the National Company Law Tribunal as on 31 March, 2025, Saggar added.
Some of the recent judgments reinforce the need for timely and transparent resolution, thereby putting greater onus on the Committee of Creditors (CoC) and the NCLT, Saggar said.
IBC's workings recently became a subject of public debate after the Supreme Court on 2 May rejected the debt resolution plan of Bhushan Power & Steel Ltd (BPSL) that was approved by NCLT in 2019 and was upheld by an appeals tribunal in the subsequent year.
However, on Monday, the apex court stayed the liquidation process and ordered status quo.