Ten years after the Insolvency and Bankruptcy Code (IBC) came into force, its biggest impact on Indian business may be less about the companies that have gone through insolvency and more about the behaviour it has changed before they reach the insolvency court.
The IBC has created a time-bound framework in which lenders can take control of the resolution process when companies default, while giving viable businesses an opportunity to find new owners or restructure their debt. The scale of cases settled even before formal admission also points to a change in creditor-debtor behaviour.
As of December 2025, 30,745 corporate insolvency resolution processes (CIRPs) had been admitted since the Code came into force, with 6,954 cases closed. Of these, 1,376 ended with approved resolution plans, while 1,260 were withdrawn under Section 12A and 1,366 were closed through appeal, review or settlement. Another 2,952 cases had been referred for liquidation, leaving 1,879 CIRPs ongoing at the end of December 2025.
The real economic impact is visible before admission
One of the clearest indications of the IBC’s deterrent effect is the volume of cases resolved before they entered the formal insolvency process.
IBBI data showed that about 30,310 cases involving underlying defaults of ₹13.78 lakh crore had been settled before admission as of March 2025. This suggests that the threat of a formal insolvency proceeding has itself become an important negotiating tool for creditors.
That is a significant change from a system in which lenders could spend years pursuing recovery while distressed businesses continued to lose value.
The post-admission numbers also show why resolution rather than liquidation remains central to the Code. As of December 2025, companies resolved through approved plans had generated realisation of more than 31.63% of their admitted claims and more than 171.54% of liquidation value. IBBI said resolution plans on average yielded 94.95% of the fair value of the companies concerned.
But delay remains the biggest value destroyer
The gains from the IBC come with an important qualification: a time-bound insolvency framework loses much of its economic value when cases remain locked in litigation and procedural disputes.
This is now one of the central issues facing the insolvency ecosystem. At the tenth annual day of the Insolvency and Bankruptcy Board of India (IBBI), government and judicial representatives stressed the need for faster disposal of cases and quicker resolution-plan approvals.
NCLT President Justice Anupinder Singh Grewal pointed to steps being taken to reduce delays and identified possible areas for further reform, including changes to admission thresholds, mediation and sector-specific provisions. NCLAT Member Indevar Pandey also stressed the importance of adhering to timelines.
The issue is not merely administrative. A distressed company can lose customers, employees, working capital and asset value while a resolution process remains pending. Every additional month can therefore affect what creditors eventually recover and whether the underlying business remains viable.
2026 amendments shift the focus towards execution
The Insolvency and Bankruptcy Code (Amendment) Act, 2026, which received Presidential assent on April 6, has sought to address several operational issues in the framework. IBBI’s own discussion paper identified delays in admission and resolution, gaps around the Committee of Creditors during liquidation and ambiguities relating to creditor rights among the challenges requiring attention.
The amendments cover multiple parts of the insolvency architecture, including corporate insolvency resolution, liquidation, voluntary liquidation, pre-packaged insolvency, personal guarantors and creditor-initiated insolvency proceedings. Subsequent regulations were notified by IBBI in June to implement the changes.
This means the next phase of the IBC is likely to be judged less by the creation of new rules and more by how effectively those rules reduce friction in the actual resolution process.
Technology could become the next force multiplier
The government has also highlighted artificial intelligence and other emerging technologies as potential tools for improving the IBC ecosystem.
The opportunity extends beyond simply digitising paperwork. Better information systems could improve claim verification, valuation, monitoring of proceedings and identification of inconsistencies across large volumes of financial and corporate data.
IBBI has already been tightening the information and valuation framework. In 2026, it issued new valuation guidelines and introduced further amendments to information-utility and insolvency-process regulations.
For creditors, better information can mean quicker decisions. For resolution applicants, it can reduce uncertainty around the assets and liabilities of a distressed company. For courts and insolvency professionals, improved data can potentially reduce procedural delays.
The next measure of success is value preserved
The first decade of the IBC established insolvency as a credible part of India’s credit architecture. It changed the balance between borrowers and creditors and created a formal route for rescuing viable businesses while allowing non-viable companies to exit.
The next decade will be harder.
The challenge is to ensure that the rising sophistication of the insolvency ecosystem does not get overwhelmed by litigation, delays and procedural complexity. The government’s emphasis on faster and value-maximising resolutions, combined with the 2026 amendments, points towards that next objective.
For India’s lenders and businesses, the ultimate test of the IBC is therefore not how many cases enter insolvency. It is how quickly viable businesses can be rescued, how much value can be preserved and how effectively creditors can recover their money without allowing distressed assets to deteriorate inside the process.