The share of corporate insolvency resolution processes (CIRP) initiated by corporate debtors themselves have declined over the years since the inception of the Insolvency and Bankruptcy Code (IBC).
Data from the Insolvency and Bankruptcy Board of India (IBBI) showed that as of March 2017, out of the total CIRPs, seven were triggered by operational creditors, eight by financial creditors and 22 by corporate debtors.
As of March 2021, 2,250 CIRPs were inititated by operational creditors, 1,887 were initiated by financial creditors and corporate debtors had triggered 277 CIRPs.
Further in June 2021, resolution processes initiated by operational creditors rose to 2,313, those by financial creditors stood at 1,942 and corporate debtors had triggered 285 CIRPs.
The IBBI data showed that operational creditors triggered 50.93 per cent of the CIRPs, followed by about 42.77 per cent by financial creditors and remaining by the corporate debtors.
However, about 80 per cent of CIRPs having an underlying default of less than Rs 1 crore, were initiated on applications by operational creditors, while about 80 per cent of CIRPs, having an underlying default of more than Rs 10 crore, were initiated by financial creditors.