Insolvency and Bankruptcy Code (IBC), enacted in 2016, aims to provide a structured framework for the reorganization, insolvency resolution, and liquidation of corporate entities, partnership firms, and individuals. Data indicates that the IBC has significantly influenced the Indian banking sector, becoming a primary route for debt recovery. According to a Reserve Bank of India report, the IBC accounted for 48% of bank recoveries in the financial year 2023-24, surpassing other mechanisms like the SARFAESI Act. Further analysis by the Indian Institute of Management Ahmedabad (IIM-A) highlights improvements in the financial performance of firms that underwent resolution under the IBC, showing gains in profitability, liquidity, and overall financial health. These findings suggest the IBC’s role in preserving business continuity and asset value.
As of December 31, 2024, over 8,000 Corporate Insolvency Resolution Processes (CIRPs) have been initiated. Of these, 3,485 corporate debtors have been rescued through resolution plans, appeals, settlements, or withdrawals. Specifically, 1,119 cases resulted in resolution plans, yielding a realizable value of 竄ｹ3.58 lakh crore for creditors, representing 162.79% of the liquidation value and 87.58% of the fair value. Conversely, 2,707 corporate debtors have been referred for liquidation. To enhance the IBC’s efficacy, the government has implemented six amendments to the code and 122 regulatory reforms since its inception. Ongoing efforts include training and capacity-building programs for insolvency professionals, adjudicating authorities, and other stakeholders. Additionally, the adoption of information technology, such as digital platforms for automation, aims to streamline processes and improve efficiency, accuracy, and speed, ultimately benefiting all parties involved.
Government has Strengthened IBC with Six Amendments and 122 Regulatory reforms since its inception
Over 8,000 CIRPs initiated, rescuing 3,485 debtors and realization of ₹3.58 lakh crore
Posted On: 01 APR 2025 hi
The legislative intent of the Insolvency and Bankruptcy Code, 2016 (IBC) is to provide a consolidated framework for reorganization, insolvency resolution and liquidation of corporate persons, partnership firms and individuals for maximization of the value of assets. Further, IBC has had a significant impact on the health of the country’s banking sector and redefined the debtor creditor relationship.
According to the RBI Report on Trend and Progress of Banking in India (December 2024), the IBC emerged as the dominant recovery route, accounting for 48% of all recoveries made by banks, followed by the SARFAESI Act (32%), Debt Recovery Tribunals (17%), and Lok Adalats (3%) in the Financial Year 2023-24. Additionally, a report by the Indian Institute of Management Ahmedabad (IIM-A) (August 2023; available at www.ibbi.gov.in), analysed the financial performance of firms that underwent resolution under the IBC and found significant improvements in the profitability, liquidity, and overall financial health of resolved firms in the post-resolution period. These findings underscore the positive impact of IBC on business continuity and value preservation.
Till 31st December 2024, 8175 Corporate Insolvency Resolution Processes (CIRPs) have been initiated. Of these, 3485 Corporate Debtors (CDs) have been rescued which includes 1119 through resolution plans; 1236 through appeal or review or settlement and 1130 through withdrawal under section 12A. Further, 2707 CDs have been referred for liquidation. In 1119 cases that have yielded resolution plans, the realisable value for the creditors have been ₹3.58 lakh crore. This amounts to 162.79% of liquidation value and 87.58% of fair value.
To facilitate expeditious resolution process under Insolvency and Bankruptcy Code, 2016 (IBC) and to ensure proper implementation of the provisions of IBC, the Government has made six amendments to the IBC and 122 amendments in regulations since inception of IBC. Further, regular training and capacity-building programs for insolvency professionals, adjudicating authorities and other stakeholders are held to improve the overall efficiency and effectiveness of the IBC ecosystem. Leveraging information technology such as digital platforms for automation and streamlining processes is another initiative to make the system more efficient, accurate, and faster, ultimately leading to better outcomes for all stakeholders.
The Minister of State in the Ministry of Corporate Affairs and Minister of State in the Ministry of Road Transport and Highways, Shri Harsh Malhotra stated this in a written reply in Rajya Sabha today.
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