Rating agency Icra on Wednesday pitched for a separate framework for small-ticket insolvency cases before they reach the National Company Law Tribunal (NCLT), saying such a mechanism would reduce pressure on the tribunal and help expedite admissions for larger accounts.

“Icra believes that there is a necessity for a separate framework for small ticket-size cases before approaching the NCLT to reduce the burden on the benches and thereby expediting admissions for larger ticket-size cases,” the agency said in a report titled ‘Performance Update: Insolvency and Bankruptcy Code’.

The suggestion comes amid persistent delays in the insolvency process, with nearly 78 per cent of ongoing corporate insolvency resolution process (CIRP) cases having crossed the prescribed 270-day limit as of March 2026.

The agency noted that while the pre-packaged insolvency resolution process (PPIRP), introduced for MSMEs, was aimed at easing resolution for smaller firms, its implementation has remained limited, with only 10 plans approved over the last five years.

The report said that after a record number of resolution plan approvals in FY24, there has been a dip in the number of resolution plans cleared in the subsequent two years. Q4FY26 saw only 43 resolution plans being approved, a sharp dip of 43 per cent quarter-on-quarter and 39 per cent year-on-year.

The fall in approved resolution plans follows the decline in cases admitted in the National Company Law Tribunal in FY26 compared to FY25, as debtors have been proactively looking to settle with lenders before insolvency proceedings are initiated, with pre-admission resolution rates being upwards of 80 per cent, the ratings agency said.

Icra said improvement in approved resolution plans would depend on continued strengthening of NCLT benches and an increase in tribunal members, as manpower shortages and infrastructure constraints continue to weigh on the timely implementation of the code.

The government and the Insolvency and Bankruptcy Board of India (IBBI) have taken several steps, including amendments to the IBC enacted in April 2026 and efforts to improve the NCLT infrastructure and manpower, which are expected to drive better recovery and lower resolution timelines, it added.

According to the report, recent amendments placing the onus on the NCLT for timelines, introducing piecemeal and group resolution, and an out-of-court settlement framework are expected to be positive from an overall recovery perspective.

It also stressed that quicker disposal of legacy cases would remain critical to improving recoveries, saying a swifter resolution of legacy cases would be critical to the success of the code.