The Insolvency and Bankruptcy Code (IBC) has played a key role in helping banks recover from the non-performing assets (NPA) crisis created by Congress and its allies during the UPA year, and has built trust and transparency in the financial system, finance minister Nirmala Sitharaman said on ‘X’ on Thursday.

The FM cited an RBI report saying that the IBC continued as the key mechanism for banks to recover stressed assets – accounting for the greatest recovery among different channels in 2022-23 (43% of the total amount recovered).

Separately, in an interview with CNN-News 18, the FM said that the S&P Global Ratings upgrade is a “good omen” for the Indian economy, and there will be a good result coming for the BJP on June 4 which could mean the stock market can really go up and be a “solid bulls market”.

On Wednesday, S&P Global Ratings revised its sovereign rating outlook on India to “positive” from “stable”, citing the country’s long-term growth prospects, which it felt were sustainable, irrespective of the outcome of the general elections. While retaining the rating for India at the lowest investment grade, S&P hinted at a much-desired rating upgrade for the country over the next 24 months, subject to several parameters, including “cautious” fiscal and monetary policies.

At present, S&P has ‘BBB-‘ long-term and ‘A-3’ short-term unsolicited foreign and local currency sovereign credit ratings, for India.

Sitharaman said that the PM had focussed on spending more money on infrastructure and ensuring that quality expenditure happens. “S&P themselves have said as a justification to why they have changed the grade and also have shown that in 24 months there is every chance of us being given a better grade,” she said.

Meanwhile, on IBC, the FM said that the gross non-performing assets (GNPA) ratio of scheduled commercial banks dipped to a multi-year low of 3% and the net non-performing assets (NNPA) ratio to 0.7% (as of December 2023). “By laying down governance norms for companies in distress, the IBC has taken corporate governance to new heights in the country,” she said.

She said that the IBC framework is continually evolving to ensure that it can meet the evolving needs of a rapidly growing economy. “Our government has taken numerous steps to strengthen the insolvency framework and ensure resolutions happen in a timely manner,” she said. “We remain committed to strengthening capacities of NCLT and NCLAT across the nation by expeditiously filling vacancies.”