Insolvency Overhaul: India's Bankruptcy Code Set for Major Upgrade

The proposed amendments to India's insolvency law aim to enhance proceedings' timelines and effectiveness. IBBI Chairperson Ravi Mital highlights improved debtor-creditor relationships and a significant reduction in default periods. The amendments, awaiting Parliament's approval, introduce new concepts like cross-border settlement, reflecting global best practices.

India's insolvency law is on the brink of a significant transformation with proposed amendments awaiting parliamentary approval. The changes aim to improve the timelines and effectiveness of proceedings, bringing India closer to global best practices, according to IBBI Chairperson Ravi Mital.

Since the inception of the Insolvency and Bankruptcy Code (IBC) in 2016, the debtor-creditor dynamic has shifted dramatically. Mital noted that fear of insolvency under IBC has led to the withdrawal of 32,000 applications, with underlying debts totaling more than Rs 14.5 lakh crore settled. The time taken for resolving defaults has also decreased substantially from 250 days to just 80 days.

As new amendments await parliamentary nod, the changes promise to introduce pivotal concepts such as cross-border insolvency and out-of-court settlements. This evolution of the IBC is poised to further strengthen India's position in the global insolvency landscape.

(With inputs from agencies.)