COntext: 

According to India Ratings and Research (Ind-Ra), average time taken for resolution of stressed assets under the insolvency law reached a three-year high in the June quarter.

About Insolvency and Bankruptcy Code (IBC), 2016 

• It lays down the provisions for conducting insolvency or bankruptcy of individuals, partnership firms, LLP and companies.
• Corporate Insolvency Resolution Process (‘CIRP’) is a recovery mechanism for the creditors of a corporate debtor. 
• A corporate Debtor (CD) means a company or Limited Liability Partnership (‘LLP’) that owes a debt to its creditors.
• When a company or LLP becomes insolvent or commits a default, the financial creditor, operational creditor or the corporate debtor can file an application to initiate the CIRP by the Adjudicating Authority, i.e. National Company Law Tribunal (‘NCLT’). 
• Timeline for completion of resolution under IBC: 270 days.
  • It can be extended subject to certain conditions. 

More About the News

• Resolution Delay: The average timeline for resolution of cases for corporate debtors (CDs) was 541 days in Q1 FY24, same as in FY23. 
  • The longest delay was 643 days for the Financial Creditors (FCs) in the first quarter of this fiscal.
• Liquidation Delay: A total of 45 per cent of the cases under the IBC have ended in liquidation.
  • In cases of liquidation, the average time taken during the June quarter was 480, 458 and 391 days for FCs, OCs, and CDs, respectively, which is the highest in the past three years.

News Source: Indian Express