The Select Committee on Insolvency and Bankruptcy Code (Amendment) Bill, 2025 has invited views and suggestions from experts, industry bodies and stakeholders to “strengthen India’s insolvency framework”. The 24-member parliamentary committee, chaired by Baijayant Panda, was formed on October 1, and the panel is currently reviewing the amendment Bill. It will submit its recommendations to the government after consulting with stakeholders.
In a note, PwC said that Bill pays 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.
“The latest amendments are the most comprehensive changes that have been made to the insolvency legislation thus far. Even though there are no timelines indicated by the government, the Bill is expected to be re-introduced in the parliament during the winter session,” said Srinivasa Rao, partner at Nangia Andersen LLP.
The bill aims to fix key bottlenecks, speed up the entire process, and introduce new frameworks for complex cases. For example, the bill proposes to make it mandatory for the National Company Law Tribunal (NCLT) to admit an insolvency application from a financial creditor within 14 days, as long as a default is clearly proven. This removes the court’s discretion to delay admission, which is currently a major source of delays.
The bill introduces new tools to handle situations that the current code struggles with. This includes creditor-initiated insolvency (CIIRP), group insolvency and cross-border insolvency. In the case of CIIRP, a group of financial creditors (holding 51% of the debt) can start a resolution process wherein the company’s existing management stays in control – under the creditors’ supervision – making it faster and less disruptive than a full-blown CIRP.
In order to improve fairness and stop misuse, the bill has clarified that the government dues will not be treated as “secured” debts. Also, the bill introduces heavy penalties for filing frivolous or vexatious applications designed purely to delay the process.
Since 2016, the IBC has undergone six legislative amendments and over 100 regulatory changes by the Insolvency and Bankruptcy Board of India (IBBI) to improve its efficacy.