Title: The IBC Revolution: A Deep Dive into Its Impact on Non-Performing Assets and Credit Flow in India
Authors: Shreyans Kailash Shah
Volume: 9
Issue: 8
Pages: 102-109
Publication Date: 2025/08/28
Abstract:
The Insolvency and Bankruptcy Code (IBC) of 2016 represents a transformative reform in India's economic and legal landscape, addressing the persistent issues of non-performing assets (NPAs), inefficient debt recovery, and prolonged corporate distress resolution. This paper explores the economic impact of the IBC on India's banking sector, corporate governance, and overall macroeconomic stability. By streamlining insolvency resolution processes and empowering creditors through time-bound procedures, the IBC aims to enhance credit recovery, encourage investment, and improve business confidence. The study evaluates key economic parameters such as the reduction in NPAs, improved recovery rates, corporate restructuring, and broader effects on GDP growth and employment. Data from official reports, case studies, and stakeholder interviews reveal both the successes and challenges of the IBC, offering insights into its effectiveness in reshaping India's insolvency framework. The findings indicate a notable improvement in recovery rates, a decline in NPAs, and enhanced investor confidence, though challenges in timely resolution and sector-specific recovery remain. This paper contributes to understanding the IBC's role in fostering economic growth and offers recommendations for further refinement in its implementation.