Parliament panel reviews IBC changes; bill likely in winter session
November 27, 2025
The Insolvency and Bankruptcy Code is set for major reforms, with an amendment bill likely to be tabled Lok Sabha in December. The changes aim to streamline debt resolution and address issues like cross-border insolvency.
New Delhi: India’s nine-year-old Insolvency and Bankruptcy Code (IBC) is set to see its biggest reform yet in the upcoming parliament session, with a select committee of the Lok Sabha holding consultations with government ministries on Thursday before finalising its report, three persons familiar with the development said.
The Union ministries of corporate affairs, and housing and urban affairs were part of Thursday’s meeting with the parliamentary committee, led by Bharatiya Janata Party's Lok Sabha member Baijayant Panda.
A revised bill based on the select committee’s report is likely to be tabled in Lok Sabha either in the second or third week of December, after the government secures cabinet approval, paving the way for the reform, said the first of the two persons cited earlier, both of whom spoke on the condition of anonymity. The parliament session will commence on 1 December, and run till 19 December.
The Insolvency and Bankruptcy Code (Amendment) Bill, 2025 seeks to introduce a cross-border insolvency regime, allow partial asset sale of bankrupt businesses, permit a largely out-of-court debt resolution for well-regulated financial creditors, and facilitate early debt settlement with lenders by distressed businesses.
The bill also proposes to allow tribunals to first approve a company’s debt resolution plan and take up disagreements among creditors on distribution of proceeds later, so that corporate turnaround plans move ahead without delays.
Thursday’s meetings covered a clause-by-clause analysis of the bill, said the second person.
Speeding up, streamlining
Reforms in IBC are expected to speed up and streamline the debt resolution ecosystem in the country, enabling sinking companies to quickly regain health and creditors to salvage their investments and enhance the economy’s productivity.
Queries emailed to Panda’s office and to the ministries of corporate affairs and housing and urban affairs remained unanswered. The bill was discussed at Thursday’s meeting as had been scheduled, the third person said.
While the proposed amendments seek to address a number of issues based on feedback from various stakeholders, they can still not be considered a comprehensive step forward by way of structural reforms, according to Jyoti Prakash Gadia, manging director at Resurgent India, a merchant bank.
“The issues regarding the time-bound redressal of the resolution process are still open, as the delays are still visible. The real need is to strengthen the tribunals to ensure timely and systematic handling of cases with strict compliance with the set guidelines by all parties,” said Gadia.
As per official data from Insolvency and Bankruptcy Board of India (IBBI), of the over 8,600 companies admitted for bankruptcy resolution in tribunals, 1,300 have been rescued and proceedings are on in 1,898 cases. More than three-fourths of the ongoing cases have been pending for more 270 days. Creditors have so far realised nearly ₹4 trillion from the resolved cases, about a third of their admitted claims.
Attention to flagged issues
The amendment proposals in the bill pay particular attention to issues flagged by courts and practitioners, the complexities arising in group and cross-border insolvency, and the misuse of withdrawal and moratorium provisions by promoters and other stakeholders, said Atul Tandon, Director, NPV Insolvency Professionals Pvt. Ltd.
“The key amendments proposed include aspects such as mandatory admission timeline, withdrawal restrictions, insolvency resolution professional selection independence, creditors’ oversight in liquidation, liquidation timelines and look back period for avoidance transactions. Besides the amendments, the government is proposing to bring in key frameworks such as creditor-initiated insolvency resolution process, group insolvency process and cross-border insolvency process,” said Tandon.
The gaps in procedures and processes need to be handled in a broader way rather than mere cosmetic changes. Scope of differences in interpretation needs to be addressed to reduce subsequent litigation in higher courts, which not only drags matters but is sometimes mis-utilised by errant parties, Resurgent India's Gadia said.
While the government has addressed several key aspects of debt resolution in the bill, there are still a few areas that may require further attention including NCLT capacity and enforcement and disputes over avoidance transactions, said Tandon of NPV Insolvency Professionals.
The Union ministries of corporate affairs, and housing and urban affairs were part of Thursday’s meeting with the parliamentary committee, led by Bharatiya Janata Party's Lok Sabha member Baijayant Panda.
A revised bill based on the select committee’s report is likely to be tabled in Lok Sabha either in the second or third week of December, after the government secures cabinet approval, paving the way for the reform, said the first of the two persons cited earlier, both of whom spoke on the condition of anonymity. The parliament session will commence on 1 December, and run till 19 December.
The Insolvency and Bankruptcy Code (Amendment) Bill, 2025 seeks to introduce a cross-border insolvency regime, allow partial asset sale of bankrupt businesses, permit a largely out-of-court debt resolution for well-regulated financial creditors, and facilitate early debt settlement with lenders by distressed businesses.
The bill also proposes to allow tribunals to first approve a company’s debt resolution plan and take up disagreements among creditors on distribution of proceeds later, so that corporate turnaround plans move ahead without delays.
Thursday’s meetings covered a clause-by-clause analysis of the bill, said the second person.
Speeding up, streamlining
Reforms in IBC are expected to speed up and streamline the debt resolution ecosystem in the country, enabling sinking companies to quickly regain health and creditors to salvage their investments and enhance the economy’s productivity.
Queries emailed to Panda’s office and to the ministries of corporate affairs and housing and urban affairs remained unanswered. The bill was discussed at Thursday’s meeting as had been scheduled, the third person said.
While the proposed amendments seek to address a number of issues based on feedback from various stakeholders, they can still not be considered a comprehensive step forward by way of structural reforms, according to Jyoti Prakash Gadia, manging director at Resurgent India, a merchant bank.
“The issues regarding the time-bound redressal of the resolution process are still open, as the delays are still visible. The real need is to strengthen the tribunals to ensure timely and systematic handling of cases with strict compliance with the set guidelines by all parties,” said Gadia.
As per official data from Insolvency and Bankruptcy Board of India (IBBI), of the over 8,600 companies admitted for bankruptcy resolution in tribunals, 1,300 have been rescued and proceedings are on in 1,898 cases. More than three-fourths of the ongoing cases have been pending for more 270 days. Creditors have so far realised nearly ₹4 trillion from the resolved cases, about a third of their admitted claims.
Attention to flagged issues
The amendment proposals in the bill pay particular attention to issues flagged by courts and practitioners, the complexities arising in group and cross-border insolvency, and the misuse of withdrawal and moratorium provisions by promoters and other stakeholders, said Atul Tandon, Director, NPV Insolvency Professionals Pvt. Ltd.
“The key amendments proposed include aspects such as mandatory admission timeline, withdrawal restrictions, insolvency resolution professional selection independence, creditors’ oversight in liquidation, liquidation timelines and look back period for avoidance transactions. Besides the amendments, the government is proposing to bring in key frameworks such as creditor-initiated insolvency resolution process, group insolvency process and cross-border insolvency process,” said Tandon.
The gaps in procedures and processes need to be handled in a broader way rather than mere cosmetic changes. Scope of differences in interpretation needs to be addressed to reduce subsequent litigation in higher courts, which not only drags matters but is sometimes mis-utilised by errant parties, Resurgent India's Gadia said.
While the government has addressed several key aspects of debt resolution in the bill, there are still a few areas that may require further attention including NCLT capacity and enforcement and disputes over avoidance transactions, said Tandon of NPV Insolvency Professionals.