Nine years after its inception, India’s Insolvency and Bankruptcy Code (IBC) continues to deliver a sobering reality check for creditors: recovery rates remain stubbornly anchored around 32 per cent, meaning lenders face an average haircut of approximately 68 per cent on admitted claims. The latest data from Q3FY26 reveals a marginal decline in recovery rate to 31.63 per cent from 32.44 per cent in the previous quarter, underscoring that despite procedural refinements and judicial interventions, the fundamental challenge of value erosion remains unresolved.
This rangebound performance raises uncomfortable questions about whether the IBC framework, despite being a transformative reform, has plateaued in its effectiveness. More…