“The credible threat of the Code, that a corporate debtor may change hands, has changed the behaviour of debtors. Thousands of debtors are resolving distress in early stages. They are resolving when default is imminent, on receipt of a notice for repayment but before filing an application, after filing an application but before its admission, and even after the admission of the application, and making best effort to avoid consequences of a resolution process,” IBBI said, while releasing the numbers for the Dec quarter.
Bankers said companies are more prudent in seeking loans now and ensure timely repayment, fearing action. Under IBC, on admission of a case, NCLT appoints a resolution professional, who works with the committee of creditors until a resolution applicant is approved by the tribunal. During the resolution process, the promoters lose their powers. While lenders and financial creditors (which includes homebuyers in case of real estate) have initiated 3,300 of the cases that were admitted, operational creditors, who could be small vendors had initiated 3,566 cases, IBBI data showed.