What Happened
- The Union Cabinet on March 10, 2026 approved amendments to two key laws: the Insolvency and Bankruptcy Code (IBC), 2016 and the Companies Act, 2013.
- The IBC amendments follow recommendations of a Lok Sabha Select Committee (headed by MP Brij Lal Panda) that examined the IBC (Amendment) Bill, introduced in August 2025, and submitted its report in December 2025.
- Key IBC changes include: introduction of a Creditor-Initiated Insolvency Resolution Process (CIIRP), provisions for group and cross-border insolvency, tightening of government tax authority claim priority, and a 180-day liquidation completion deadline.
- Cabinet approval paves the way for the amended IBC legislation to be introduced in the ongoing Budget session of Parliament.
- Companies Act amendments focus on expanding the CSR (Corporate Social Responsibility) framework, strengthening independent director governance, and simplifying director KYC compliance.
Static Topic Bridges
Insolvency and Bankruptcy Code, 2016 — Architecture and CIRP Framework
The Insolvency and Bankruptcy Code (IBC), 2016 is India's unified insolvency law, consolidating and replacing over a dozen earlier laws including the Sick Industrial Companies (Special Provisions) Act (SICA), 1985; the Recovery of Debts Due to Banks and Financial Institutions Act (RDDBFI), 1993; and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI), 2002. It was enacted based on recommendations of the Bankruptcy Law Reforms Committee (BLRC) chaired by T.K. Viswanathan.
- Enacted: 28 May 2016; Nodal Ministry: Ministry of Corporate Affairs
- Insolvency regulator: Insolvency and Bankruptcy Board of India (IBBI), established under Section 188 of IBC
- Adjudicating Authority: National Company Law Tribunal (NCLT) for corporates; Debt Recovery Tribunal (DRT) for individuals and partnership firms
- CIRP (Corporate Insolvency Resolution Process) timeline: 180 days → extendable by 90 days (with 66% CoC approval) → maximum 330 days including litigation periods
- Committee of Creditors (CoC): Body of financial creditors that approves resolution plans; requires 66% majority for key decisions
- Earlier framework problem: SICA's BIFR (Board for Industrial and Financial Reconstruction) process averaged 5-7 years; IBC's CIRP target is 330 days maximum
- IBC has resolved Rs 3+ lakh crore of stressed assets since 2016 (as of 2024)
Connection to this news: The amendments address observed gaps in the CIRP framework — particularly the need for a pre-CIRP creditor-initiated process, group insolvency coordination, and closing loopholes on government authority claim priority — making the overall resolution process faster and more equitable.
Key IBC 2025 Amendments — What Changes and Why
The IBC (Amendment) Bill, 2025 introduces several structural reforms to India's insolvency ecosystem:
- CIIRP (Creditor-Initiated Insolvency Resolution Process): A new out-of-court mechanism for specified financial creditors; requires 51% creditor consent by debt value; debtor management remains in place (unlike traditional CIRP where an Insolvency Professional takes control); must conclude within 150 days (extendable by 45 days)
- Group Insolvency: New Chapter VA enables coordinated insolvency proceedings for interconnected companies (holding-subsidiary-associate relationships under Companies Act 2013 definitions); allows common NCLT bench and shared insolvency professional
- Cross-Border Insolvency: Provisions for multi-jurisdictional corporate distress — aligns with the UNCITRAL Model Law on Cross-Border Insolvency
- Government Claims Clarification: State/central authority tax claims will be treated as secured only if backed by a contractual agreement — eliminating automatic priority for government dues, which had created uncertainty for commercial creditors
- Liquidation Timeline: Complete liquidation must be done within 180 days of liquidation commencement order
- Look-back Period: Preferential and undervalued transaction scrutiny now starts from the date of application filing (not admission), closing a strategic delay loophole
Connection to this news: These amendments address the three most prominent criticisms of the existing IBC: delays (CIIRP and tighter timelines), isolated proceedings that ignore corporate group dynamics (group insolvency), and unpredictability about government claim priorities (statutory lien clarification).
Companies Act, 2013 — CSR Framework and Corporate Governance
The Companies Act, 2013 replaced the Companies Act, 1956 and modernized India's company law, introducing a mandatory CSR (Corporate Social Responsibility) framework for the first time in any major economy's company law. Section 135 of the Companies Act mandates CSR spending for companies meeting prescribed financial thresholds.
- Companies Act, 2013: 470 sections, 7 schedules; administered by the Ministry of Corporate Affairs
- CSR obligation (Section 135): Applies to companies with net worth ≥ Rs 500 crore, or turnover ≥ Rs 1,000 crore, or net profit ≥ Rs 5 crore; 2% of average net profit of preceding 3 years to be spent on CSR activities
- 2025 Amendment — revised CSR thresholds (proposed): Net worth ≥ Rs 100 crore, or turnover ≥ Rs 500 crore, or net profit ≥ Rs 3 crore — significantly lowering the bar, bringing mid-size companies under CSR obligations
- Independent Director (ID) reforms: Resignation effective 30 days after notice, extending liability period; aims to strengthen accountability
- Director KYC: Changed from annual filing to once every 3 years (effective from March 31, 2026) — ease of compliance reform
- NCLT: National Company Law Tribunal established under Companies Act 2013 to adjudicate company law disputes; merged functions of Company Law Board and CLB
Connection to this news: The Cabinet approval signals that both the IBC and Companies Act changes will be introduced as bills in Parliament — together representing the most comprehensive overhaul of India's corporate insolvency and governance framework since the IBC was originally enacted in 2016.
Key Facts & Data
- IBC enacted: 28 May 2016; Replaced: SICA 1985, RDDBFI 1993, and 10+ other laws
- IBBI (Insolvency regulator): Established under Section 188 of IBC
- CIRP maximum timeline: 330 days (180 + 90 extension + litigation periods)
- CoC approval threshold for key decisions: 66% by value of financial debt
- CIIRP (new): Out-of-court; 51% creditor consent; 150 days (+45 extension); management stays with debtor
- IBC asset recovery since 2016: Rs 3+ lakh crore resolved
- BLRC: Bankruptcy Law Reforms Committee (T.K. Viswanathan) — recommended IBC framework
- Companies Act 2013: Section 135 — CSR mandate (2% of avg net profit over 3 years)
- Revised CSR threshold (2025 amendment): Net worth ≥ Rs 100 crore or turnover ≥ Rs 500 crore or net profit ≥ Rs 3 crore
- NCLT: Adjudicating authority under both IBC and Companies Act 2013