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Banks are moving away from the Insolvency and Bankruptcy Code

Kumari Sonali

Banks are moving away from the Insolvency and Bankruptcy Code:

Banks are moving away from the Insolvency and Bankruptcy Code (IBC) due to falling recovery rates (down to 28% in FY24 from 40% in FY23) and prolonged resolution timelines (often exceeding 600 days). The number of cases admitted to NCLT has also droppedThe Insolvency and Bankruptcy Code (IBC), once a pivotal tool for resolving distressed assets in India, is experiencing a slowdown in case admissions. Banks are increasingly hesitant to utilize this channel due to diminishing recovery rates and prolonged resolution timelines. This shift has led financial institutions to explore alternative recovery methods.

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