IBC, enacted in 2016 and last amended in 2026, is an umbrella legislation consolidating Indian laws relating to the reorganization and insolvency resolution of corporate persons, partnership firms, and individuals.

Achievements of IBC

• Decline in NPAs: Bank GNPA levels fell sharply from 11.5% in FY18 to 2.3% in FY26.
• Improved Recoveries: IBC accounted for 52.3% of total bank recoveries in FY25 with total recoveries crossing ₹4.11 trillion.
• Record PSB Profits: Public Sector Banks (PSBs) reported a combined net profit of ₹1.98 trillion in FY25.
• Shift in Control under IBC: The IBC has shifted decision-making power from defaulting promoters to creditors.

Issues Associated with IBC

• Delays in Corporate Insolvency Resolution: Reaching 744 days as of March 2026, against the mandated time limit of 330 days.
• Decreased Recovery: Relative to liquidation value has reportedly fallen by about 30 per cent.
• Implementation: Insolvency and Bankruptcy Fund provided for in the original Code remains unoperationalised.
• Technological Deficit: While e-courts exist, there is a lack of technological fluency among some judges.

Way Forward:

• Strengthening Institutional Capacity: Expansion of NCLT/NCLAT Benches and establishment of special fast-track courts. 
• Operationalise individual insolvency: To address defaults in partnerships and proprietorships, which form the backbone of Indian entrepreneurship.
• Improving Asset Valuation: Shift from liquidation value to enterprise value to better reflect a company's potential and reduce the haircuts taken by creditors.