India pushes IBC amendments to speed up bankruptcy resolutions
India pushes IBC amendments to speed up bankruptcy resolutions
New Delhi unveils the Insolvency and Bankruptcy Code Amendment Bill 2025 to speed up creditor-led resolutions, with out-of-court settlements and cross-border insolvency provisions.
New Delhi — Finance and corporate affairs minister Nirmala Sitharaman on Wednesday moved the Insolvency and Bankruptcy Code (Amendment) Bill, 2025, in the Lok Sabha. The bill would introduce a creditor-initiated framework that leans on out-of-court settlements to speed up bankruptcy resolution and would include new provisions for cross-border and corporate group insolvency cases. Lenders would have the option to pursue the new framework or the existing CIRP.\n\nThis is the first change to the IBC since 2021 and the seventh since the law's inception in 2016. The amendments aim to reduce delays that erode asset values, with the average resolution time rising to 764 days between April and December 2025, up from 597 days in March 2025, according to experts. The current 330-day deadline, counting litigation, would be replaced by a 150-day deadline under the new regime.\n\nUnder the new framework, a majority of unrelated financial creditors and the debtor can agree on a rescue plan informally, while the National Company Law Tribunal would limit its role to affirming the moratorium and approving the plan. The corporate debtor would continue to run the company under the supervision of a resolution professional. Lenders would have the option to choose between the new framework and the existing corporate insolvency resolution process (CIRP).\n\nExperts say this marks a transition from mistrust to trust, from regime punishing lack of governance to a regime motivating governance and from an adversarial approach to a conciliatory one based on coordination for insolvency resolution.
