Lok Sabha Passes IBC Amendment Bill 2026 for Faster Resolutions

Bill No. 107-C of 2025, Dated: 30.03.2026

The Insolvency and Bankruptcy Code (Amendment) Bill, 2026, as passed by the Lok Sabha, introduces key reforms aimed at enhancing efficiency, strengthening creditor rights, and maximising value under the insolvency framework.

1. Introduction of Creditor-Initiated Resolution Process

The Bill provides for a creditor-initiated insolvency resolution process, enabling creditors to take a more proactive role in triggering and steering insolvency proceedings.

This is expected to improve timeliness and effectiveness in addressing stressed assets.

2. Strengthening of Timelines

The amendments focus on enforcing stricter timelines across various stages, including:

Admission of insolvency applications
Approval of resolution plans
Liquidation proceedings

This aims to reduce delays and ensure time-bound resolution.

3. Enhanced Role of Committee of Creditors (CoC)

The Bill strengthens the powers and responsibilities of the Committee of Creditors (CoC) by:

Expanding its role during the resolution phase
Extending its influence into the liquidation stage

This ensures that creditors have greater control over key decisions impacting recoveries.

4. Clarifications on Key Aspects

To improve clarity and reduce litigation, the Bill provides specific guidance on:

Treatment of claims
Handling of guarantor assets
Avoidance transactions (such as preferential, undervalued, or fraudulent transactions)

These clarifications aim to streamline proceedings and minimise interpretational disputes.

5. Focus on Efficiency and Value Maximisation

Overall, the amendments are designed to:

Improve process efficiency
Reduce legal uncertainties
Maximise value realisation for stakeholders

6. Conclusion

The Bill represents a significant step towards strengthening India’s insolvency regime, making it more creditor-driven, time-bound, and outcome-focused, while enhancing confidence among investors and financial institutions.