A growing number of resolution plans under the Insolvency and Bankruptcy Code (IBC) are being approved, with 60% of all resolutions to date finalised in just the last three years, according to data released by the Insolvency and Bankruptcy Board of India (IBBI). Out of a total of 1,194 resolution plans approved over the past eight years, 708 resolutions were cleared between 2021 and 2024 alone.
The data, updated through December 2024, also shows that over 30,000 cases involving defaults of ₹13.8 trillion were settled before admission, reflecting the IBC’s growing influence in encouraging early dispute resolution.
IBC reduces transition time from loan default to recovery
The IBBI cited a study by IIM Bangalore that shows a significant reduction in delinquency resolution timelines. The average duration for a loan account to shift from “Overdue” to “Normal” fell from 248–344 days in 2019–20 to 30–87 days in 2023–24. Similarly, the shift from “Overdue” to “Default” dropped from 169–194 days to 33–81 days in the same period.
The study also reported a 50% increase in average employee expenses in listed firms three years after resolution, indicating improved business health and workforce recovery post-IBC process.
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Credit realisation and revival outlook improving
While creditor realisation under IBC remains moderate at 32.8% of admitted claims as of March 2025, IBBI Chairperson Ravi Mital emphasized that the framework has yielded results beyond mere recovery metrics.
“The IBC has strengthened credit markets, fostered entrepreneurship, and significantly enhanced ease of doing business,” said Mital in IBBI’s latest newsletter. He added that while challenges like process delays remain, the Code’s evolving implementation and legal maturity position it well for long-term impact.
Liquidation ratio improves significantly
IBBI data also indicates an encouraging trend in liquidation. In 2017–18, for every company resolved, five went into liquidation. By March 2025, the ratio has shifted, with nearly 10 firms resolved for every five liquidated, pointing to a strengthened resolution-first approach.
The data reinforces the IBC’s role not only as a mechanism for creditor recovery, but as a broader tool for financial discipline, enterprise continuity, and sustainable economic recovery.
