Government to Table IBC Amendment During Budget Session

The Central Government is expected to introduce the Insolvency and Bankruptcy Code (Amendment) Bill, 2025 (the “Amendment Bill”) during the second half of the budget session commencing March 9, 2026, following the submission of the report by the select committee of the Lok Sabha (the “Select Committee”).

The Amendment Bill, originally introduced on August 12, 2025, and subsequently referred to the Select Committee, represents the seventh legislative intervention since the enactment of the Insolvency and Bankruptcy Code, 2016 (the “IBC”), with the previous amendment having been carried out in 2021.

The Amendment Bill aims to fix ongoing problems with the IBC system, such as slow resolution times in liquidation cases, loss of value in troubled assets, low recovery rates for creditors, and limited resources at the National Company Law Tribunal (NCLT) and appeal courts.

The Amendment Bill suggests adding a group insolvency process, a way to handle insolvency cases that cross borders, and options for creditors to start insolvency proceedings, all aimed at improving and expanding the current system for resolving these issues

At the same time, the government has mentioned in the last budget that it plans to create a technology system to make the IBC process more consistent, clear, and quick, while also improving the courts and appeal processes to speed up insolvency cases.

The IBC framework has reportedly facilitated the resolution of over 1,000 companies, resulting in direct recoveries exceeding INR 3.3 lakh crore for creditors. However, the proposed amendments acknowledge that further institutional strengthening is necessary to enhance efficiency and preserve asset value.

If enacted, the Amendment Bill is expected to improve the timelines and effectiveness of insolvency proceedings, bolster creditor confidence, and align India’s insolvency regime more closely with evolving global best practices, thereby reinforcing financial system stability and resilience.