Source: Mint
Context:
A Lok Sabha select committee reviewed the IBC (Amendment) Bill, 2025 and is set to table its report in the lower house.
Objective: Overhaul the Insolvency and Bankruptcy Code (IBC), 2016, to make the distressed-assets market more attractive and reduce delays in corporate turnaround.
Key Provisions Proposed in the Bill
- Faster tribunal admissions to accelerate insolvency resolution.
- Creditor-led, mostly out-of-court bankruptcy resolution scheme for quick corporate turnaround.
- Group insolvency scheme to address insolvency of multiple companies in a corporate group simultaneously.
- Cross-border insolvency resolution regime to manage international insolvencies efficiently.
Purpose and Rationale
- Address systemic gaps in IBC implementation, including:
- Delays due to shortage of judges.
- Uncertainty in resolution plan finality.
- Accountability issues among insolvency professionals.
- Goal: Strengthen creditor confidence and improve outcomes, while maintaining the jurisprudential balance evolved through judicial interpretation.
What is Insolvency and Bankruptcy Code (IBC)?
The Insolvency and Bankruptcy Code (IBC), 2016 is India’s comprehensive law for resolving insolvency and bankruptcy in a time-bound and structured manner.
- A single, unified law replacing multiple old laws related to corporate and personal insolvency.
- Provides a legal framework to resolve the financial distress of companies, limited liability partnerships, partnerships, and individuals.
- Ensures creditors can recover dues efficiently, while also giving businesses a chance for revival.
