₹4 trillion in claims over shady pre-bankruptcy deals clog India's insolvency system
Creditors are chasing nearly ₹4 trillion tied up in questionable deals made by company promoters and executives before bankruptcy.
That's as much as all recoveries since the Insolvency and Bankruptcy Code (IBC) began in 2016.
Right now, over 1,570 of these cases—called PUFE cases—are filed at India's company law tribunals.
Why should you care?
This backlog means it's taking ages to get money back—only about ₹7,900 crore has actually been recovered so far.
These shady deals drain assets that should go to creditors, making the financial system weaker and less trustworthy.
Even though the IBC says these transactions must be reversed to protect value, slow courts and complicated legal battles keep dragging things out.
Big cases like Dewan Housing Finance show just how risky this is for everyone who counts on a fair financial system.