Recently, The Parliament passed the Insolvency and Bankruptcy Code (Amendment) Bill, 2026.
- As of December 2025, IBC has facilitated the resolution of 1,376 companies, helping creditors to recover 4.11 lakh crore.
- Financial creditors have seen recovery exceeding 34% of their claims.
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About Insolvency and Bankruptcy Code (Amendment) Bill, 2026
- The Insolvency and Bankruptcy Code (Amendment) Bill, 2026 seeks to strengthen India’s insolvency framework by streamlining processes, reducing delays, and enhancing creditor-driven resolution.
- It also aims to improve ease of doing business by increasing efficiency, transparency, and predictability in insolvency proceedings.
Key Features
- Delay in Admission of Insolvency Applications: The National Company Law Tribunal (NCLT) is mandated to admit insolvency applications within 14 days, but delays often extend to several months.
- The proposed amendment aims to streamline this initial stage to ensure timely initiation of insolvency proceedings.
- Mandatory Admission of Insolvency Applications: The National Company Law Tribunal (NCLT) must admit insolvency applications once default is proven, subject only to procedural compliance and absence of disciplinary proceedings against the resolution professional.
- The Bill bars rejection on any other grounds, reducing discretion and expediting the process.
- Creditor-initiated Insolvency Resolution Process (CIIRP): Creditor-initiated Insolvency Resolution Process (CIIRP) has been introduced that provides for an out-of-court initiation mechanism which can be done by only “specified financial creditors”.
- At least 51% of financial creditors will have to agree to initiate this process.
- Framework for Group and Cross-border Insolvency: The Bill also introduces a framework for group insolvency and cross-border insolvency, aimed at improving investor confidence and aligning domestic processes with international best practices.
- Removing Conflict of Interest: It proposed removing conflicts of interest by disallowing the resolution professional (RP) of a corporate debtor from becoming the liquidator.
- Stipulated Timeline: It recommended a three-month timeline for the National Company Law Appellate Tribunal (NCLAT) to reduce “undue appellate delays”
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About the Insolvency and Bankruptcy Code (IBC), 2016
- IBC was enacted in 2016 to provide a robust framework for debt resolution through corporate insolvency resolution processes (CIRP) and liquidation.
- It seeks to maximize asset value and distribute fair proceeds among creditors.
- The IBC provides for a time-bound resolution of firms, addressing the issue of firm exit in India.
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- Broadening Term “Corporate Debtor”: It recommended adding an explanation to Section 240C to clarify and broaden the term “corporate debtor” to explicitly include any person incorporated with limited liability outside India.
- Reforms in PPIRP Voting: It recommended lowering the voting threshold for pre-packaged insolvency resolution process (PPIRP) to 51%.
- Further it empowers Insolvency and Bankruptcy Board of India (IBBI) to set timelines and conduct standards for the Committee of Creditors.
- Shift from Criminal to Civil Penalties: It replaces criminal penalties with civil penalties for offences such as contravention of moratorium or resolution plan and non-disclosure of dispute or payment of debt by operational creditor.
About Pre-packaged Insolvency Resolution Process (PPIRP)
- PPIRP is a fast-track insolvency resolution mechanism introduced under the Insolvency and Bankruptcy Code, 2016.
- Aim: To enable time-bound and cost-efficient restructuring of stressed MSMEs through prior agreement between debtor and creditors.
Key Features
- Debtor-in-Possession Model: Existing management retains control during the process.
- Pre-negotiated Resolution: Resolution plan is agreed informally before formal initiation.
- Time-bound Process: Completion within 120 days.
- Minimum Creditor Approval: Requires 66% consent of financial creditors.
- Base Resolution Plan: Promoter submits a base plan open to competitive bidding.
- Limited Disruption: Ensures continuity of business operations.
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6 Apr 2026
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