Credit markets have played a crucial role in sustaining growth in almost all countries, including advanced countries, which now have fully developed capital markets. As per World Bank data, average Bank credit to the private sector as a percentage of GDP during the period 1960 to 2015 was 25.61%. A 70% figure indicates that the country has relatively well developed the financial system. Such a low bank credit as a percentage of GDP necessitates the creation of a favourable environment promoting business and competition to sustain the high growth rate of emerging economy like India. For the development of robust domestic credit markets, it is imperative to have Corporate Insolvency Framework which will enable efficient and timely resolution of credit default cases.The Reserve Bank and the Central Government, therefore, initiated several institutional measures to recover the past dues to banks and FIs and reduce the NPAs. These were Debt Recovery Tribunals (DRTs), Lok Adalats (people’s courts), Asset Reconstruction Companies (ARCs) and the Corporate Debt Restructuring (CDR) mechanism. Settlement Advisory Committees were formed at regional and head office levels of commercial banks. Furthermore, banks can also issue notices under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 for enforcement of security interest without intervention of courts. Further, banks, Fls, and NBFCs (excluding securitization companies’/ reconstruction companies) have been permitted to undertake sale/purchase of NPAsDespite the availability of various options to settle NPAs Banks have become increasingly vulnerable to poor recovery on loans made to corporates. The problem of non-performing assets (NPAs) in their books has become a cause of serious concern. India’s Non-Performing Loans Ratio stood at 9.3 % in Mar 2017, compared with the ratio of 7.5 % in the previous year taking India to 5th on the list of highest Non-Performing Assets. Our country is reeling under NPA burden of over Rs 7.33 lakh crore as of June 2017. As per World Bank data, until 2016, insolvency resolution in India took 4.3 years on an average, higher than many major economies. Such delays have twin effects – the cost of liquidation goes up, and the realizable value of assets drops. This also acts as a severe constraint on the lending capacity of Indian banks thereby further choking the already weak and shallow credit market and making it harder for business enterprises to fund themselves.