The Insolvency and Bankruptcy Code (IBC), which came into force in 2016, has completed 10 years, marking a significant milestone in India’s financial and legal reform journey.
Over the past decade, the IBC has evolved into a key institutional mechanism for improving credit discipline, accelerating recovery processes and strengthening confidence in the country’s insolvency ecosystem.
According to official data released by the government, the resolution process under the IBC has facilitated realisation of more than ₹4 lakh crore for creditors as of March 2026.
Resolution process strengthens recovery ecosystem
Around 1,419 cases had yielded resolution plans by March 2026. Recoveries under these cases stood at 95% of fair value and 167% of liquidation value, highlighting the effectiveness of the framework in value maximisation.
A total of 8,987 insolvency cases had been admitted under the Code till March 2026, of which 7,102 cases reached closure.
Among these, 4,099 companies, accounting for nearly 58% of closed cases, were successfully rescued, while 3,003 cases ended in liquidation.
The government noted that 1,388 rescued entities were closed following appeal, review or settlement processes, while 1,292 cases were withdrawn.
Notably, around 42% of the companies resolved through approved resolution plans were either previously referred to the Board for Industrial and Financial Reconstruction (BIFR) or had become defunct, underlining the Code’s role in reviving financially stressed enterprises.
Pre-admission settlements cross ₹14 lakh crore
IBC has also significantly altered debtor-creditor dynamics by encouraging settlements before formal insolvency proceedings begin.
More than 30,000 cases filed before the National Company Law Tribunal (NCLT) were resolved at the pre-admission stage through withdrawals, involving an estimated ₹14 lakh crore.
According to the government, these settlements demonstrate the deterrent effect of the Code and its role in promoting timely resolution of financial stress.
The statement added that without such settlements and withdrawals, the gross Non-Performing Asset (NPA) ratio of banks would likely have remained substantially higher than the reported level of 2.1% as of September 2025, compared with nearly 11.8% in 2017.
Recovery rates and timelines improve
India’s insolvency framework has also witnessed improvements in recovery rates and resolution timelines over the years.
The government said average recovery rates increased from nearly 15–20% during the pre-IBC period to around 30% after implementation of the Code.
Resolution timelines have also reduced from around six to eight years earlier to nearly two years under the present framework.
S&P Global Ratings upgraded India’s insolvency framework from ‘Group C’ to ‘Group B’, recognising improvements in the country’s recovery and resolution ecosystem.
RBI identifies IBC as most effective recovery mechanism
The Reserve Bank of India’s report on Trends and Progress of Banking in India 2024–25 identified the IBC as the most effective mechanism for recovery of stressed assets.
Out of the total recoveries of ₹1.04 lakh crore made by Scheduled Commercial Banks through multiple recovery channels, nearly ₹0.54 lakh crore, or around 52.4%, was realised through the IBC process.
The RBI report further noted that recovery rates under the IBC improved to 36.6% in 2024–25 from 28.3% in the previous year.
Studies highlight behavioural and business impact
An Indian Institute of Management Bangalore study observed a significant improvement in borrower discipline following implementation of the IBC.
The study found that the proportion of loan accounts moving from the ‘Overdue’ category to ‘Normal’ category increased steadily between 2018 and 2024.
The average number of overdue days also reduced sharply from 248–344 days earlier to 30–87 days.
Another study by the Indian Institute of Management Ahmedabad in 2025 highlighted strong post-resolution business revival among firms resolved under the IBC.
According to the study, average sales of resolved firms increased by nearly 89% over five years, while asset turnover ratios improved by around 131%.
Average capital expenditure also rose by approximately 106% after resolution, reflecting renewed investments and improved business viability.
The aggregate market valuation of resolved listed entities increased from around ₹2.8 lakh crore to nearly ₹9 lakh crore during the five-year period following resolution.
IBC seen as key pillar for economic growth
The government said the IBC fundamentally transformed India’s approach towards insolvency resolution by introducing a creditor-driven and time-bound framework focused on corporate revival and value maximisation.
As India progresses towards the Viksit Bharat 2047 vision, the continued evolution of a resilient insolvency system will remain critical for preserving productive capital, improving financial stability and supporting sustainable economic growth.