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June 14, 2026
The Dispatch

Definition

Resolution Plan

A resolution plan is the proposal a bidder submits to take over and revive a company in insolvency, approved by the Committee of Creditors and the NCLT.

Under the IBC, prospective buyers (resolution applicants) submit plans describing how much they will pay creditors and how they will run the company. The Committee of Creditors picks the best plan, which the NCLT then sanctions, transferring the company to the new owner.

The amount offered relative to admitted claims determines the haircut creditors take. Successful resolution plans, such as those for several large steel and infrastructure firms, have produced varied recoveries, shaping how banks provision against stressed exposures.

Related terms

  • Insolvency and Bankruptcy Code (IBC)The Insolvency and Bankruptcy Code, 2016 is India's unified framework for time-bound resolution or liquidation of defaulting companies through the NCLT.
  • National Company Law Tribunal (NCLT)The NCLT is the adjudicating authority for corporate insolvency under the IBC and for company-law matters such as mergers and oppression cases.
  • Committee of Creditors (CoC)The Committee of Creditors is the body of financial creditors that decides the fate of a company in insolvency, including approving or rejecting resolution plans.
  • Haircut (Resolution)A haircut is the portion of their dues that lenders forgo when a stressed loan is resolved, settled or sold below its full value.

Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.