Corporate Insolvency Resolution Process (CIRP)
Step-by-Step
Understanding the CIRP flow is essential for both Prelims (MCQs on IBC provisions) and Mains (GS3 essays on NPA resolution, economic reforms).
- Trigger: Financial creditor, operational creditor, or the corporate debtor itself files an application with the NCLT.
- Admission: NCLT must admit or reject within 14 days (financial creditor) or 10 days (operational creditor).
- Moratorium (Section 14): On admission, a moratorium is declared — all legal proceedings against the debtor are stayed; assets cannot be transferred or encumbered.
- IRP appointment: An Interim Resolution Professional is appointed to manage affairs.
- CoC formation and RP appointment: Committee of Creditors constituted; RP takes over from IRP.
- Resolution plan: RP invites resolution plans; CoC approves by 66% vote; NCLT confirms.
- If no resolution: Liquidation is ordered under Chapter III of IBC.
- Recovery rates: IBC has yielded higher creditor recoveries compared to the earlier BIFR regime, though absolute recovery rates remain below global benchmarks.
- IBC (Amendment) Act, 2026: Introduced further streamlining provisions for the CIRP process.
● Tracked since May 02, 2026 · last seen June 15, 2026 · updates as the daily brief publishes
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