Insolvency and Bankruptcy Code (IBC) completes 10 years

📌 Summary:

• IBC, enacted in 2016, completed 10 years on 28 May 2026; consolidated India's fragmented insolvency framework into a creditor-driven, time-bound mechanism
• As of March 2026: 8,987 cases admitted; 7,102 closed (4,099 rescued ~58%, 3,003 liquidated); 1,419 resolution plans yielded over ₹4 lakh crore for creditors
• Realisation = 95% of fair value and 167% of liquidation value — strong creditor outcomes
• Deterrent effect: 30,000+ cases worth ~₹14 lakh crore withdrawn at pre-admission stage at NCLT; gross NPA fell from ~11.8% (2017) to 2.1% (Sep 2025)
• Recovery rates rose from 15–20% (pre-IBC) to ~30% (post-IBC); rose further to 36.6% in 2024–25 (up from 28.3%); IBC contributed 52.4% (₹0.54 lakh crore) of total bank recoveries of ₹1.04 lakh crore in 2024–25 (RBI Trend & Progress 2024–25)
• Resolution timelines reduced from 6–8 years to ~2 years
• S&P Global upgraded India's insolvency framework from 'Group C' to 'Group B'
• IIM Bangalore behavioural study: average overdue days fell from 248–344 to 30–87 days (2018–24)
• IIM Ahmedabad (2025): post-resolution firms saw sales rise 89%, asset turnover 131%, capex 106%; market cap of resolved listed firms rose from ₹2.8 lakh crore to ₹9 lakh crore over 5 years
• 42% of resolution cases were earlier with BIFR or defunct — IBC enabled revival of distressed firms

🎯 UPSC Relevance: GS3 Indian Economy — Liberalisation, Industrial Policy & Growth; banking sector reforms; debtor-creditor relationship; ease of doing business.

📝 Prelims Facts:

• IBC enacted 2016; administered by Ministry of Corporate Affairs; adjudicating authority — NCLT (corporate) and DRT (individual/partnership)
• IBBI (Insolvency and Bankruptcy Board of India) is the regulator
• Average recovery rate under IBC in 2024–25: 36.6%
• Gross NPA of banking sector: 2.1% (Sep 2025), down from 11.8% (2017)
• BIFR — Board for Industrial and Financial Reconstruction (predecessor)

🔑 Key Term: Corporate Insolvency Resolution Process (CIRP) — time-bound, creditor-led process under IBC for resolving stressed corporate debt; max 330 days including litigation.