According to credit rating agency ICRA, due to pandemic-related issues and suspension of fresh proceedings, financial creditors may realize a significant decline to ₹60,000 - ₹65,000 crore through IBC (the Insolvency and Bankruptcy Code) in FY21, compared to ₹1-lakh crore in FY20.

ICRA has warned everyone that the realization from resolution plans could continue to suffer in FY22, as fresh insolvency proceedings are suspended till December 25, 2020. For accounts that default after March 25, 2020, they could be further extended by three more months. ICRA observed that the outbreak of Covid-19 and the suspension of new proceedings under the IBC have resulted in a sharp slowdown in the resolution process and, accordingly, the realization for financial creditors has declined.

ICRA observed that the number of CIRPs closed during FY21 declined by 61% compared to FY20. In the first six months of FY21, only 42 companies who underwent a corporate insolvency resolution process (CIRP) have seen a resolution plan approved. Thus yielding ₹12,600 crores as recovery for financial creditors. During the first half of FY21, the number of cases admitted declined by 82% in comparison to the first half of FY20. The backlog of cases has not been reduced due to the hampering of normal business operations during the pandemic.