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The Insolvency and Bankruptcy Code (IBC), 2016 has completed a decade since its enactment, emerging as one of India's most significant economic and institutional reforms. Enacted on the recommendations of the Bankruptcy Law Reforms Committee (2015) chaired by T.K. Viswanathan, the Code consolidated multiple fragmented insolvency laws into a unified, creditor-driven and time-bound framework. It fundamentally shifted India from a “debtor-in-possession” model to a “creditor-in-control” regime, thereby strengthening credit discipline, improving recovery mechanisms and enhancing investor confidence.

Key Achievements of IBC

Over the last ten years, IBC has significantly transformed India's financial landscape:

• ?4.32 lakh crorerealised for creditors through resolution processes till March 2026.
• Recovery value reached 167% of liquidation value and 95% of fair value.
• Gross NPA ratio of Scheduled Commercial Banks declined sharply from 11.8% (2017) to 2.1% (September 2025), a 12-year low.
• More than 30,000 cases involving nearly ?14 lakh crore were resolved at the pre-admission stage, demonstrating the Code’s strong deterrent effect.
• 58% of closed cases resulted in successful rescue of firms rather than liquidation.
• Resolution timelines reduced from 6–8 years (pre-IBC) to around 2 years.
• S&P Global Ratings upgraded India’s insolvency framework from Group C to Group B.
• According to RBI, IBC accounted for ?0.54 lakh crore (52.4%) of total recoveries made by banks through various recovery channels in 2024–25.

Institutional Framework and Process

The IBC ecosystem is anchored by:

• Insolvency and Bankruptcy Board of India (IBBI) – regulator.
• National Company Law Tribunal (NCLT) and Debt Recovery Tribunal (DRT) – adjudicating authorities.
• Insolvency Professionals (IPs) – manage resolution proceedings.
• Information Utilities (IUs) – maintain authenticated financial information.

The Corporate Insolvency Resolution Process (CIRP) begins upon default, followed by a moratorium, constitution of the Committee of Creditors (CoC), and approval of a resolution plan by 66% voting share. The Code prescribes a maximum timeline of 330 days for resolution.

Recent Reforms

The IBC (Amendment) Act, 2026 introduced:

• Creditor-Initiated Insolvency Resolution Process (CIIRP) requiring approval of 51% financial creditors.
• Strengthening of the Clean Slate Principle.
• Greater powers for the CoC during liquidation.
• Clarification that government dues are not secured debt.
• Penalties for frivolous filings and fraudulent transactions.

Persistent Challenges

Despite its success, several concerns remain:

• Average resolution time has increased to 744 days, far exceeding the statutory limit of 330 days.
• Recovery against admitted claims declined to 23% in FY26 from 46% in FY25, leading to large creditor haircuts.
• Shortage of NCLT members and infrastructure bottlenecks.
• Complex insolvency cases in the real-estate sector, involving thousands of homebuyers.
• Delays in post-resolution approvals and credit access for resolved firms.

Way Forward

Strengthening NCLT capacity, institutionalising mediation, adopting the UNCITRAL Model Law on Cross-Border Insolvency, improving accountability of insolvency professionals, and focusing on enterprise value maximisation are critical for enhancing the effectiveness of the Code.