Latest data showed that 269 resolution plans were approved during 2023-24, as against 189 during the previous year, an increase of 42%.

The Insolvency and Bankruptcy Code (IBC) has helped improve the lending culture in India as promoters are now keen to repay the debt to banks and also clear the dues of vendors and other creditors, fearing loss of control over their business in case of continued default.
As a result, data available with NCLT showed, till Feb, 28,617 applications for initiation of corporate insolvency with underlying default of Rs 10.2 lakh crore were withdrawn before their admission. This indicated a behavioural shift among debtors as they opted to settle their dues in the early stages of distress.
With an insolvency process getting streamlined, the ratio of the number of cases ending with resolution and cases in which liquidation is ordered, has improved from 0.46 in FY23 to 0.61 during the FY24.
So far, 950-odd resolutions have helped creditors realise around 32% of the admitted claims and 162% of the liquidation value. What has skewed the number is that 44% of the cases, which yielded resolution plans, were earlier with BIFR or were defunct. In these cases the realised amount was around 12% of the admitted claims. “These cases being old/defunct resulted in lower realisation as compared to the average realisation,” said a source.
Govt and RBI believe that the fall in NPAs of banks is partly attributed to IBC, which even the regulator noted was the dominant mode of recovery as 43% of the amount realised by banks was via this route.