Centre: IBC Delivers Rs 4.32 Lakh Crore Bank Recoveries

A new government fact sheet underscores the transformative impact of the Insolvency and Bankruptcy Code on India’s banking sector. Through approved resolution plans, banks have recovered close to Rs 4.32 lakh crore—exceeding liquidation value by 116.85 percent and fair value by 94.56 percent.

Since its rollout in 2016, the IBC has consolidated India’s previously fragmented insolvency processes into a single, time-bound framework. This shift has improved recovery rates, strengthened creditor rights, and facilitated the revival of stressed but viable companies.

Data indicates that 8,987 CIRPs were admitted by March 2026, with 1,419 resolved through approved plans. Many others were settled through alternative mechanisms such as appeals and Section 12A withdrawals, showcasing the Code’s adaptability.

The RBI’s 2024-25 banking report reveals that the IBC contributed Rs 54,528 crore toward total bank recoveries of Rs 1,04,099 crore—over 52 percent of the total. This performance outpaced recoveries from SARFAESI, DRTs, and Lok Adalats combined.

Academic studies reinforce these findings. IIM Ahmedabad reports that resolved firms saw sales grow 76 percent, assets rise 50 percent, and market valuation increase from Rs 2 lakh crore to Rs 6 lakh crore. Liquidity improved by 80 percent while capital expenditure grew 130 percent.

IIM Bangalore notes improved corporate governance and a 3 percent drop in borrowing costs. Together, these results illustrate how the IBC has strengthened India’s credit culture and supported sustainable business recovery.