IBC Resolves 1,419 CIRPs, Recovers Rs 4.32 Lakh Crore For Creditors: Government

New Delhi, Jul 22 (KNN) The Insolvency and Bankruptcy Code (IBC) has facilitated the resolution of 1,419 Corporate Insolvency Resolution Processes (CIRPs) since its inception, resulting in recoveries of Rs 4.32 lakh crore for creditors as of March 31, 2026, the government informed the Rajya Sabha.

Replying to a question, Minister of State for Corporate Affairs Harsh Malhotra said the IBC has strengthened the insolvency resolution framework while improving credit discipline and value recovery.

IBC Amendment Aims To Speed Up Resolution

The minister said the Insolvency and Bankruptcy Code (Amendment) Act, 2026 has been introduced to improve the functioning of the insolvency framework by reducing delays, enhancing governance and maximising value for stakeholders.

The amendments introduce a Creditor-Initiated Insolvency Resolution Process (CIIRP), enabling financial institutions to initiate out-of-court insolvency proceedings in cases of genuine business failure, with the objective of ensuring quicker resolution under creditor oversight.

The revised framework also includes provisions for group insolvency and cross-border insolvency to facilitate coordinated resolution of interconnected companies across jurisdictions, minimise conflicting proceedings and improve value recovery through time-bound approvals.

IBC Strengthening Credit Discipline

The government said the impact of the IBC is reflected in improving banking sector asset quality.

Citing the Reserve Bank of India's Financial Stability Report, the minister said the Gross Non-Performing Asset (GNPA) ratio of scheduled commercial banks declined to 1.8 percent in March 2026.

He also referred to a study by the Indian Institute of Management Bangalore (IIMB), which found that the IBC has strengthened borrower repayment discipline by encouraging timely loan servicing.

According to the study, both the value and number of overdue loan accounts declined significantly during the period under review.

(KNN Bureau)