Lok Sabha Question No. 4138 (UNSTARRED), answered on 2025-08-18
Subject: Impact of IBC on Ease of Doing Business
Ministry: CORPORATE AFFAIRS
Asked by: Shri Rao Rajendra Singh, Shri Vishweshwar Hegde Kageri, Shri Janardan Mishra, Shri Khagen Murmu, Shri Vishnu Dayal Ram, Shri Tejasvi Surya, Shri Kota Srinivasa Poojary

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 4138

ANSWERED ON MONDAY THE 18 TH  AUGUST, 2025/ SRAVANA 27, 1947 (SAKA)

## IMPACT OF IBC ON EASE OF DOING BUSINESS

## QUESTION

4138. SHRI KOTA SRINIVASA POOJARY:

SHRI VISHWESHWAR HEGDE KAGERI:

SHRI RAO RAJENDRA SINGH:

SHRI TEJASVI SURYA:

SHRI KHAGEN MURMU:

SHRI VISHNU DAYAL RAM:

SHRI JANARDAN MISHRA:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

- (a) the details of the major achievements of the Insolvency and Bankruptcy Code (IBC) and impact on the ease of doing business in the country;
- (b) the  data  regarding  the  recovery  rate  achieved  by  lenders  under  the  IBC  as compared to the earlier insolvency regime/bankruptcy system;
- (c) the  data  regarding  the  non-performing  assets  (NPAs)  and  its  impact  on  the banking  sector  after  the  implementation  of  the  IBC  along  with  the  steps  taken  to minimise delays occurring in applicants under IBC;
- (d) the role of the IBC in bringing out a positive change in the credit culture in the country; and
- (e) the steps taken by the Government to incentivise resolution professionals who are instrumental in dispute resolution?

## ANSWER

MINISTER OF STATE IN THE MINISTRY OF CORPORATE AFFAIRS AND MINISTER OF STATE IN THE MINISTRY OF ROAD TRANSPORT AND HIGHWAYS

[HARSH MALHOTRA]

(a)& (b): The major achievement of the Insolvency and Bankruptcy Code (IBC) has been  its  ability  to  resolve  financially  distressed  companies  and  realisation  by  the creditors thereon.  By offering a clear and time-bound framework for revival, the IBC

has  strengthened  creditor  confidence  and  encouraged  both  domestic  and  foreign investment.  The IBC has played a pivotal role in improving the ease of doing business in  India  by  introducing  a  faster  and  more  structured  insolvency  resolution  process maximising the value of assets, promote entrepreneurship, availability of credit and balance the interests of all the stakeholders.   As of March 31, 2025, a total of 1,194 companies have been successfully resolved under the IBC framework. Through these cases, creditors have realised an amount of ₹ 3.89 lakh crore, which is 32.8% of the total admitted claims, over 170% of the liquidation value and more than 93% of the fair value of these companies, as assessed at the time of admission into the IBC process.

- (c): IBC has played a crucial role in improving the overall health of India's banking sector. According to the latest RBI's Financial Stability Report (June 2025), Gross Non -Performing Assets (GNPAs) have significantly declined, reaching a multi-decadal low of 2.3% at the end of March 2025. This reduction indicates a stronger, more stable banking system. The RBI's Report on Trends and Progress of Banking in India for 2023 -24 (released on December 26, 2024) highlights that SCBs recovered a total of ₹96,325 crore  through  various  channels.  Out  of  this,  the  IBC  channel  alone  contributed  a significant  ₹46,340  crore,  accounting  for  48.1%  of  the  total  recoveries. The Government has undertaken six legislative amendments to the IBC and introduced over 100  changes  to  the  regulations  since  its  inception,  to  strengthen  the  insolvency resolution framework and enhance procedural efficiency thus minimizing the delays.

(d): The IBC has led to a behavioural shift among companies and their debtors. By creating a credible threat that defaulting companies might lose ownership, the Code has fundamentally reshaped the dynamics between debtors and creditors.

(e): Several  initiatives  have  been  taken  to  build  the  capacity  of  insolvency professionals (IPs). In FY 2024 -25, the Insolvency and Bankruptcy Board of India (IBBI) conducted a series of workshops, webinars, and conclaves to enhance practical skills. It  also  collaborated  with  expert  bodies  like  the  World  Bank,  Indian  Institute  of Corporate Affairs (IICA) and International Finance Corporation (IFC) for training and research. Additionally, international conferences at  Indian Institute of Management (IIM)  Ahmedabad,  IIM  Bangalore,  and  Indian  School  of  Business  (ISB)  Hyderabad brought together global experts, offering IPs valuable exposure to best practices.

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