Introduction
IBC Amendment Bill 2025 moves to Select Committee: The Insolvency and Bankruptcy Code (Amendment) Bill, 2025 has been referred to a Select Committee of Parliament for detailed examination. The Bill seeks to strengthen India’s insolvency framework by reducing delays, improving creditor recovery, and aligning the process with global best practices.
Reducing Delays in Resolution
A key focus of the Bill is to expedite the corporate insolvency resolution process (CIRP). The National Company Law Tribunal (NCLT) will now be mandated to admit insolvency cases within 14 days and approve resolution plans within 30 days.
To ease pressure on judicial institutions, the Bill introduces out-of-court creditor-initiated resolution, enabling creditors to initiate faster settlements without litigation.
Static GK fact: NCLT was established in 2016 under the Companies Act, 2013 to adjudicate corporate law and insolvency cases.
Maximising Value for Stakeholders
The Bill strengthens the powers of the Committee of Creditors (CoC) by allowing NCLT to restore CIRP in exceptional circumstances, ensuring that viable firms are not prematurely liquidated.
This move prioritises value maximisation for creditors, employees, and shareholders. It further reinforces investor confidence in India’s restructuring framework.
Static GK fact: The Insolvency and Bankruptcy Code, 2016 replaced multiple laws like SICA and the Companies Act provisions, consolidating them into a single law.
Enhancing Governance and Compliance
A significant innovation in the Bill is the introduction of a voluntary group insolvency framework. This allows coordinated resolution of stressed entities within a corporate group, acknowledging interlinked debts and operations.
The cross-border insolvency framework will also provide a mechanism for accessing assets abroad, aligning India with the UNCITRAL Model Law on Cross-Border Insolvency.
The clean slate principle has been explicitly reaffirmed. Once a resolution plan is approved, all past claims against the debtor are extinguished, unless specifically provided.
Significance of IBC 2016
The original Insolvency and Bankruptcy Code, 2016 was a landmark reform. It introduced the creditor in control model, replacing the earlier debtor-friendly system. It created time-bound processes for resolving insolvency and provided a structured framework for both corporates and individuals.
Static GK fact: India’s IBC 2016 improved its ranking in the World Bank’s Ease of Doing Business Index, especially in the “Resolving Insolvency” parameter.
Way Forward
The referral of the IBC Amendment Bill 2025 to the Select Committee highlights the importance of building a more efficient and globally aligned insolvency ecosystem. The provisions are expected to improve creditor confidence, economic stability, and business continuity in India.
Static Usthadian Current Affairs Table
IBC Amendment Bill 2025 moves to Select Committee:
| Topic | Detail |
| Bill referred | Select Committee of Parliament |
| Key objective | Reduce delays and maximise value in insolvency resolution |
| NCLT mandate | Admit cases in 14 days, approve plans in 30 days |
| Out-of-court resolution | Creditor-initiated settlements allowed |
| CoC powers | Can request restoration of CIRP in rare cases |
| Group insolvency | Voluntary framework for corporate groups |
| Cross-border insolvency | Framework aligned with UNCITRAL model |
| Clean slate principle | Past claims extinguished after plan approval |
| IBC origin | Enacted in 2016 to consolidate insolvency laws |
| Major shift | Debtor in possession to creditor in control model |
