Published Online:January 2026
Product Name:The IUP Journal of Accounting Research & Audit Practices
Product Type:Article
Product Code:IJARAP040126
DOI:10.71329/IUPJARAP/2026.25.1.70-83
Author Name:Debashree Biswas and Dwarikanath Mishra
Availability:YES
Subject/Domain:Finance
Download Format:PDF
Pages:70-83
India enacted the Insolvency and Bankruptcy Code (IBC) 2016, a consolidation and amendment of the prevailing recovery laws. This study focuses on the role of IBC in improving the profitability of Indian banks by enhancing their asset quality. For this purpose, pre- and post-reform analyses have been done regarding the variations in nonperforming assets (NPA) slippage, NPA recovery, and their effect on the annual profits of the banking sector. Further, a comparative analysis of asset quality between banks in the public and private sectors has been performed to address the efficacy of IBC, sectorwise. The result demonstrates the significant effect of IBC on banks. There has been significant improvement in asset quality after enactment of IBC in terms of reduction in GNPA slippage and expansion in GNPA recovery.
Any nation’s economic activities depend on its sound and well-administered banking system. As a fast-developing economy, India needs a steady and profitable banking industry. However, nonperforming assets (NPA) are a significant faultline for Indian banks, especially public sector banks.