IBC Amendment Bill 2025: Strengthening Insolvency Framework

The Lok Sabha passed the Insolvency and Bankruptcy Code (Amendment) Bill, 2025, introducing 12 amendments to bolster the existing system. Aimed at addressing practical challenges and refining processes, the bill also incorporates global best practices and replaces the fast-track process with a new creditor-initiated framework.

The Lok Sabha has passed the Insolvency and Bankruptcy Code (Amendment) Bill, 2025, which proposes 12 amendments designed to fortify the current framework. These changes aim to mitigate practical challenges identified since the original 2016 code, blending in lessons learned and global best practices.

Finance Minister Nirmala Sitharaman highlighted how the IBC has sustained economic health by resolving stressed assets, emphasizing its role in recovering Rs 1,04,099 crore in NPAs. Notably, the IBC process alone reclaimed Rs 54,528 crore, demonstrating its efficacy for commercial banks.

The bill introduces a creditor-initiated insolvency model with reduced timelines for small firms, alongside provisions for group and cross-border insolvency. The legislation hopes to enhance transparency and investor confidence while refining resolution processes.

(With inputs from agencies.)