Till debt do us apart

Nearly a decade into its existence, the IBC framework needs to be reimagined, report Raghu Mohan & Abhijit Lele

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"A comprehensive law like the IBC is often viewed as a last resort by lenders — an avenue that needs to be explored after exhausting all alternatives. However, this view stems from the lack of a comprehensive vision for the future of a beleaguered borrower," noted Rajeshwar Rao, deputy governor, Reserve Bank of India (RBI), at a conference on bankruptcy in Ahmedabad (May 6, 2022). His observation — five years after the Insolvency and Bankruptcy Code came into being — was a pointer to the convergence of opinion that outcomes under this architecture have not turned out the way it was envisaged.

Close to the end of IBC's first decade, the timeline for Corporate Insolvency Resolution Process (CIRP) resolution continues to increase for financial creditors (FCs), operational creditors (OCs), and corporate debtors (CDs), standing at its longest since FY21. The timeline recorded for FY25: 723 days for FCs, 724 days for OCs, and 577 days for CDs.