Insolvency and Bankruptcy Code: Paving the Way for Economic Resilience

The Insolvency and Bankruptcy Code (IBC) has revolutionized corporate dispute resolution by increasing transparency and efficiency. Despite achievements, issues like resolution timelines remain. The 2025 amendment aims to reduce these challenges, incorporating provisions to align with global standards. Measures aim to expedite processes and boost NPA recovery, improving financial stability.

The Insolvency and Bankruptcy Code (IBC) has significantly revamped the insolvency landscape, becoming a cornerstone of corporate dispute resolution by championing transparency and efficiency. Financial Services Secretary M Nagaraju lauds its impact but acknowledges existing hurdles.

Key challenges include the timelines of resolutions and liquidations, leading to value deterioration and reduced creditor returns. Addressing an event organized by IBBI and Insol India, Nagaraju highlighted the seventh amendment -- IBC Amendment Bill 2025, recommended by the select committee, as a means to tackle these issues.

The amendment proposes introducing group insolvency processes, cross-border insolvency, and creditor-initiated insolvency processes. These reforms aim to align India's insolvency framework with global standards, enhancing resolution timelines and reinforcing financial stability. Active efforts by government and financial bodies, including reviewing large bank accounts and issuing advisories, aim to expedite processes and improve recovery rates.

(With inputs from agencies.)