(MENAFN- KNN India) New Delhi, Aug 19 (KNN) The Insolvency and Bankruptcy Code (IBC) has demonstrated significant success in transforming India's insolvency framework since its implementation, according to information presented to the Lok Sabha by Minister of State for Corporate Affairs, Harsh Malhotra.

The Code has emerged as a critical mechanism for resolving financially distressed companies while ensuring creditor recovery.

By establishing a clear and time-bound framework for corporate revival, the IBC has strengthened creditor confidence and attracted both domestic and foreign investment to the Indian market.

As of March 31, 2025, the IBC framework has successfully resolved 1,194 companies.

Through these resolution cases, creditors have recovered Rs 3.89 lakh crore, representing over 170 per cent of the liquidation value and more than 93 per cent of the fair value of these companies as assessed during their admission into the IBC process.

This performance demonstrates the Code's effectiveness in maximising asset value while balancing stakeholder interests.

The IBC's impact extends significantly to India's banking sector health. According to the Reserve Bank of India's Financial Stability Report released in June 2025, Gross Non-Performing Assets have declined to a multi-decadal low of 2.3 per cent as of March 2025, indicating substantial improvement in banking system stability.

The RBI's Report on Trends and Progress of Banking in India for 2023-24, released on December 26, 2024, revealed that Scheduled Commercial Banks recovered Rs 96,325 crore through various channels.

The IBC contributed Rs 46,340 crore to this total, accounting for 48.1 per cent of all recoveries and highlighting its role as a primary recovery mechanism.

Since its inception, the Government has implemented six legislative amendments to the IBC and introduced over 100 regulatory changes to strengthen the insolvency resolution framework and enhance procedural efficiency, thereby reducing delays in the process.

The Code has catalysed a fundamental behavioural shift in debtor-creditor relationships. By creating a credible threat that defaulting companies may lose ownership control, the IBC has reshaped corporate payment discipline and accountability structures across the economy.

To support the framework's implementation, the Insolvency and Bankruptcy Board of India has undertaken extensive capacity-building initiatives for insolvency professionals.

During FY 2024-25, the IBBI conducted workshops, webinars, and conclaves while collaborating with institutions including the World Bank, Indian Institute of Corporate Affairs, and International Finance Corporation for training and research programs.

International conferences held at premier institutions such as IIM Ahmedabad, IIM Bangalore, and ISB Hyderabad have provided Indian insolvency professionals with exposure to global best practices through interactions with international experts, further strengthening the ecosystem's capabilities.

(KNN Bureau)

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