In 2025, the IBC 2016 in India underwent significant proposed reforms through the IBC Amendment Bill 2025, presented in the Lok Sabha on 12 August 2025. These amendments aim to resolve long-standing challenges in the insolvency ecosystem, reduce delays, and strengthen the rights of creditors and stakeholders.
Key Features of the IBC Amendment Bill 2025
- Faster timelines: The Bill seeks to speed up admission and resolution of insolvency cases, reducing procedural delays.
- Creditor-Initiated Resolution: Introduction of CIIRP (Creditor-Initiated Insolvency Resolution Process) to enhance creditor authority and transparency.
- Stronger liquidation supervision: Empowering the Committee of Creditors (CoC) for better oversight and faster resolution.
- Clarified security interests: Reforming rules around PUFE transactions (Preferential, Undervalued, Fraudulent, Extortionate) during liquidation.
- Group and cross-border insolvency: Provisions for group insolvency and rules reflecting international best practices.
- Curbing misuse: Measures to prevent delays through withdrawal or moratorium exploitation by promoters or stakeholders.
Judicial Developments under IBC in 2025
Several landmark judicial pronouncements shaped IBC implementation in 2025:
- CCI approvals: Courts emphasized that Competition Commission of India (CCI) approvals are mandatory before CoC approval of resolution plans.
- Timelines and integrity: Courts reinforced strict adherence to statutory timelines, discouraging procedural delays.
- Operational creditors’ rights: Clarifications strengthened IBC’s self-contained, time-bound framework, integrating it with other statutes like PMLA.
Objectives of the Insolvency and Bankruptcy Code (IBC)
The IBC was enacted in 2016 based on the T.K Vishwanathan Committee Report to consolidate and modernize insolvency laws in India. Its key objectives include:
- Simplifying and expediting insolvency resolution.
- Protecting the interests of creditors and stakeholders.
- Maximizing asset value of corporate persons.
- Promoting entrepreneurship and timely revival of companies.
- Enhancing credit availability through efficient debt recovery.
- Establishing the Insolvency and Bankruptcy Board of India (IBBI) as the regulatory authority.
What Is Insolvency and Bankruptcy Code 2016?
The IBC is a unified law governing insolvency and bankruptcy resolution for companies, LLPs, firms, and individuals (excluding financial service providers).
- Insolvency: When a debtor cannot repay outstanding obligations.
- Bankruptcy: Legal status declared by a competent court for insolvent entities.
- Exit law of India: IBC consolidates prior laws like SICA 1985 and RDDB 1993, improving debt recovery for creditors.
Timeframes under IBC
| Entity Type | Resolution Period | Extension |
| General Companies | 180 days | With creditor approval |
| Small Companies / Startups (≤ ₹1 Cr turnover) | 90 days | 45 days in special cases |
If no resolution is reached, the company is moved to liquidation.
Key Institutions under IBC
Insolvency and Bankruptcy Board of India (IBBI)
- Regulates insolvency professionals, agencies, and information utilities.
- Comprised of 10 members appointed by the Central Government.
Role of Insolvency Professionals
- Manage the resolution process and asset oversight.
- Facilitate creditor decision-making and financial transparency.
Adjudication
- NCLT: Handles corporate insolvency cases.
- DRT: Manages insolvency cases for individuals.
- Courts oversee initiation, professional appointments, and resolution approvals.
Role of Committee of Creditors (CoC)
- Formed by financial creditors to decide on debt resolution.
- Powers include asset sale, repayment restructuring, and approval of resolution plans.
- If resolution fails, assets enter liquidation, with proceeds distributed in the following order:
- Insolvency resolution costs
- Secured creditors
- Employees’ dues
- Unsecured creditors
Historical and Recent Amendments to IBC
| Year | Amendment Highlights |
| 2017 | Repealed IBC Ordinance 2017 |
| 2019 | Extended resolution time from 180 to 330 days |
| 2020 | Prohibited initiation for defaults during COVID lockdown |
| 2021 | Introduced Pre-Packaged Insolvency Resolution Process (PIRP) for MSMEs |
| 2023 | Updated regulations for corporate insolvency, claim verification, and cooperation with resolution professionals |
Current Status and Impact of IBC
- Over ₹3.3 lakh crore recovered via IBC with 28,000+ cases disposed as of 2024.
- Economic Survey 2025: 3,171 corporate debtors rescued through CIRP; 947 cases resolved via approved plans, generating ₹3.36 lakh crore.
- Creditors recovered about 32% of claims, equaling 85% of fair asset value.
- IBC reforms in 2025 aim to improve commercial certainty, creditor confidence, and global investment perception.
Conclusion
The IBC has evolved from a 2016 legislative framework into a cornerstone of India’s financial ecosystem. The 2025 amendments are set to enhance insolvency resolution efficiency, safeguard creditor rights, and promote timely revival or liquidation of distressed assets. By integrating international best practices and strengthening regulatory mechanisms, the IBC ensures that India remains a conducive environment for investment and sustainable economic growth.
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