New Delhi, Dec 4 (NationPress) S&P Global Ratings has elevated India's insolvency framework from Group C to Group B, highlighting enhanced creditor protection and increased efficiency under the Insolvency and Bankruptcy Code (IBC).

This upgrade comes after S&P's adjustment of India's creditor-friendliness score, moving it from weak to medium, indicating a consistent history of creditor-driven resolutions.

Recent cases illustrate improved speed and greater recovery rates, which have bolstered trust in the system.

The IBC has reinforced credit discipline, favoring creditors in the resolution process, with promoters now facing a genuine risk of losing control over their businesses, according to S&P.

Recovery rates have surged to over 30%, a significant rise from the 15–20% range seen before the IBC's implementation.

On the other hand, secured creditors tend to recover significantly more than unsecured creditors. Additionally, the average duration for resolving non-performing loans has drastically decreased to roughly two years, down from six to eight years previously, as reported.

While recognizing the advancements made, S&P cautions that India's insolvency system still lags behind more established frameworks in Group A and certain regions in Group B.

The agency also noted that overall recovery rates are still modest on a global scale and fluctuate considerably across different sectors, particularly benefiting asset-heavy industries like steel and power.

It raised concerns about structural issues: secured and unsecured creditors voting as a unified class might weaken the voice of secured lenders when unsecured debts are substantial.

The efficacy of measures aimed at preventing inequitable outcomes—such as ensuring recovery values align with liquidation standards and retaining appropriate court oversight—will necessitate ongoing vigilance, as emphasized by S&P.