NEW DELHI, Mar 30: Nirmala Sitharaman on Monday informed the Lok Sabha that the Insolvency and Bankruptcy Code has played a transformative role in restoring the strength of India’s banking system, particularly by enabling substantial recovery of stressed assets.
While presenting the Insolvency and Bankruptcy Code (Amendment) Bill, 2025, the minister highlighted that the resolution framework has not only helped banks reclaim a significant portion of bad loans but has also encouraged improved governance among companies undergoing restructuring.
She noted that firms emerging from the resolution process are demonstrating stronger financial discipline and better compliance standards, indicating a positive shift in corporate behaviour since the Code’s implementation in 2016.
According to Sitharaman, more than half of the non-performing assets have been resolved through the mechanism, underlining its effectiveness in addressing long-standing financial stress within the banking ecosystem.
The proposed amendments seek to enhance efficiency by reducing delays in the admission of insolvency applications and streamlining procedures. The Bill, introduced in August 2025, was subsequently reviewed by a Lok Sabha Select Committee, which submitted its recommendations in December the same year.
The Code, which has already undergone multiple revisions, continues to evolve as a key instrument in maintaining financial stability and supporting sustainable economic growth.