BS Number Wise: Asset reconstruction companies need to rebuild

They have been losing business as the IBC process picks up pace

India has repeatedly tried to fix the problem of debt recovery. First with debt recovery tribunals, then asset reconstruction companies (ARCs), and later instituted the Insolvency and Bankruptcy Code in 2016.

Though IBC has not performed as well as expected, a Business Standard analysis shows that its recovery rates are higher than other debt settlement modes.


 

Companies recovered a third of the amount involved under the IBC in 2021-22. For the four years until 2020-21, the recovery from IBC averaged 43.5 per cent, compared to 26.4 per cent for ARCs, 4.5 per cent for debt recovery tribunals