The Insolvency and Bankruptcy Code, 2016 has enhanced India’s insolvency and credit system, leading to better recovery mechanisms and a structured resolution process for struggling entities. Creditors have recovered around Rs 4.32 lakh crore through approved resolution plans under the IBC as of March 2026, surpassing liquidation and fair value percentages.
The IBC has notably boosted recovery outcomes for the banking sector, with scheduled commercial banks recovering Rs 54,528 crore through the IBC out of a total of Rs 1,04,099 crore. This contribution exceeded recoveries from other channels like SARFAESI, Debt Recovery Tribunals, and Lok Adalats, as per the RBI’s report.
Studies by IIM Ahmedabad and IIM Bengaluru have highlighted successful bankruptcy case resolutions under the IBC. Post-resolution, firms under the IBC witnessed improvements in recovery rates, sales growth, operational break-even, employee expenses, asset growth, capital expenditure, and profitability, aligning with industry standards.
Market valuations for listed firms tripled from Rs 2 lakh crore to Rs 6 lakh crore, liquidity improved by 80%, and there was a 3% reduction in the cost of debt, as per the IIM Bangalore study. These findings indicate significant enhancements in various business aspects for firms undergoing resolution through the IBC process.
The IBC has positively impacted credit discipline, as evidenced by a comprehensive study by IIM Bangalore. The study revealed a decrease in overdue loan accounts, an increase in transitions from ‘Overdue’ to ‘Normal’ categories, and a reduction in the average number of days a loan account stays overdue before normalization. Despite operational challenges and delays in some cases, the IBC stands as a crucial reform in India’s financial and corporate resolution framework, with further amendments aimed at enhancing efficiency and recovery outcomes.
