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Finance Minister Nirmala Sitharaman connected Monday (March 30, 2026) defended the Insolvency and Bankruptcy Code (IBC) successful Parliament, citing the precocious level of realisations from the distressed assets, betterment for creditors, and turnaround of companies that person emerged from the solution process.
Replying to the statement connected the Insolvency and Bankruptcy (Amendment) Bill 2026, the Finance Minister said that the constituent of the IBC was not indebtedness recovery, but alternatively the rescue of viable businesses and addressing their fiscal stress.
“The IBC is simply a model for rescuing viable businesses and resolving fiscal accent portion preserving the endeavor value,” Ms. Sitharaman explained. “It was ne'er intended to beryllium a debt-recovery tool. Recovery values are a byproduct. The main volition is to rescue viable businesses and marque definite that we resoluteness the fiscal issues that they face.”
Market-driven process
Therefore, she said, the IBC process is market-driven and recoveries bespeak the underlying plus prime and commercialized viability of the distressed enterprise.
“The IBC really realises 94.95% of the just worth of the institution astatine the clip of admission,” Ms. Sitharaman said. “Realisation besides is exceeding 171.54% of the liquidation value, which indicates the betterment levels, reflects the enterprise’s distressed authorities upon entry, and is not a nonaccomplishment of the solution framework.”
She added that, arsenic of December 2025, IBC has facilitated the solution of 1,376 companies, enabling creditors to retrieve ₹4.11 lakh crore. Financial creditors person besides seen betterment exceeding 34% of their claims. The IBC was primitively enacted successful 2016.
Improved recognition ratings
Ms. Sitharaman besides said that the IBC has led to the improved recognition standing of companies that person emerged from the process, adding that the proportionality of companies that are resolved alternatively than liquidated has improved implicit the years.
“In fiscal twelvemonth (FY) 2017-18, for each 1 institution resolved, 5 companies went into liquidation,” she said. “However, successful FY 2024-25, this ratio has present substantially improved and has travel adjacent to one.”
Another occurrence of the process, the Minister said, was that the “credible threat” of losing ownership done the IBC process has pushed debtors to settee 32,179 cases adjacent earlier they participate the ceremonial process, addressing underlying defaults worthy ₹14.62 lakh crore.
The Lok Sabha passed the Bill to amend the insolvency instrumentality to supply for strict timelines, an out-of-court colony enactment and alteration the model for cross-border insolvency processes. IBC has been amended 7 times since its inception successful 2016.
