What Happened
- The Lok Sabha passed the Insolvency and Bankruptcy Code (Amendment) Bill 2025 on March 30, 2026, introducing a package of 12 amendments aimed at speeding up insolvency resolution and enhancing stakeholder value.
- Finance Minister Nirmala Sitharaman told the Lok Sabha that the IBC amendments would strengthen the resolution ecosystem by mandating transparency from Committees of Creditors (CoC) — they must now record reasons for selecting a particular resolution applicant.
- The Bill introduces a mandatory 14-day NCLT admission rule: if default is established via digital records from an Information Utility, the NCLT must admit or reject the insolvency application within 14 days, eliminating the prolonged entry-stage delays that erstwhile promoters exploited to stall proceedings.
- A Creditor-Initiated Insolvency Resolution Process (CIIRP) is introduced with a compressed 150-day timeline for out-of-court settlements before formal insolvency proceedings commence.
- A 30-day timeline is proposed for the CoC to approve or reject a resolution plan — addressing delays at the plan-approval stage.
- The Bill incorporates all recommendations of the Parliamentary Select Committee; the government stated the IBC framework has resolved over ₹3.5 lakh crore of stressed assets since its inception in 2016.
Static Topic Bridges
Insolvency and Bankruptcy Code 2016: Framework and Institutional Architecture
The Insolvency and Bankruptcy Code (IBC), enacted in 2016, created a unified legal framework for insolvency resolution of individuals, partnership firms, and companies in India, replacing a fragmented system of laws including the Companies Act (winding up), SARFAESI Act, and Debt Recovery Tribunals. It established a time-bound Corporate Insolvency Resolution Process (CIRP) with clear roles for the NCLT, Resolution Professionals (RPs), and Committees of Creditors (CoC).
- IBC enacted: May 28, 2016; came into force in phases through 2016-2017.
- Adjudicating authority for companies: National Company Law Tribunal (NCLT); for individuals and partnerships: Debt Recovery Tribunal (DRT).
- Resolution Professional (RP): an insolvency professional who takes over management of the corporate debtor upon admission; operates the company as a going concern while seeking bids from resolution applicants.
- Committee of Creditors (CoC): comprising financial creditors of the corporate debtor; approves or rejects resolution plans by 66% vote threshold.
- Insolvency and Bankruptcy Board of India (IBBI): the regulator for insolvency professionals, insolvency professional agencies, and information utilities.
- Statutory CIRP timeline: 180 days, extendable by 90 days with CoC approval; hard cap of 330 days (including litigation time) set in 2019.
Connection to this news: The IBC amendments directly address the gap between the 330-day statutory cap and the actual average resolution time of 602 days, by introducing hard admission deadlines (14 days) and plan-approval deadlines (30 days) at the stages most prone to delay.
CIRP Performance: Timelines, Recovery Rates, and the Case for Amendment
Since IBC's inception through 2025, approximately 7,000+ CIRPs have been initiated. The Code has shown success in improving recovery rates over older frameworks (BIFR under SICA) but remains hampered by significant timeline violations. The 2025 amendments represent the fourth major amendment round (after 2018, 2019, and 2021) and target structural bottlenecks at the NCLT admission stage and CoC deliberation stage.
- Average time taken to conclude CIRPs resulting in resolution plans: ~602 days (against the 330-day cap).
- About 78% of ongoing CIRPs have continued for more than 270 days.
- Recovery rate for resolved cases: approximately 33% of admitted claims; but 171% of liquidation value — the IBC at least recovers more than the liquidation alternative.
- Pre-Packaged Insolvency Resolution Process (PPIRP): introduced for MSMEs; requires consent of 66% unrelated financial creditors and shareholder special resolution before filing; timeline: 120 days.
- Information Utilities (IUs): digital repositories of financial contracts and debt records; the 2025 amendment's 14-day rule is contingent on IU records establishing default — incentivising greater use of IU infrastructure.
Connection to this news: The 14-day mandatory admission rule leverages Information Utility data to cut the most commonly exploited delay point — the NCLT admission stage — which has historically been used by erstwhile promoters to file appeals and drag proceedings for months.
Pre-Packaged Insolvency and Comparative Global Models
Pre-packaged insolvency (PPIRP) is a hybrid resolution mechanism where the debtor and major creditors agree on a resolution plan before formally filing for insolvency. This avoids prolonged NCLT proceedings while preserving the legal protection of the insolvency framework. India introduced PPIRP for MSMEs in 2021 through an ordinance (later codified). The 2025 IBC amendments deepen the pre-negotiation framework by introducing CIIRP — a creditor-initiated, 150-day out-of-court resolution track.
- PPIRP eligibility: micro, small, and medium enterprises (MSMEs) with debt up to ₹1 crore (threshold set in 2021).
- PPIRP timeline: 120 days (much shorter than CIRP's 330-day cap).
- CIIRP (new under 2025 amendment): creditor-initiated; 150-day compressed timeline; designed to resolve cases before formal NCLT admission where both parties are willing.
- Global precedents: UK's "pre-pack administration" and US Chapter 11 "pre-packaged bankruptcies" are well-established models; India's PPIRP and CIIRP draw on these.
- CoC transparency requirement (new): CoC must now log reasons for selecting a resolution applicant — reduces arbitrariness in creditor decision-making.
Connection to this news: The CIIRP introduced in the IBC Amendment Bill 2025 is India's latest attempt to replicate the efficiency of pre-packaged insolvency at a broader scale, reducing NCLT workload while accelerating value realisation for creditors.
Key Facts & Data
- IBC enacted: May 28, 2016
- Number of IBC amendments: 4 major rounds — 2018, 2019, 2021, 2025
- Average CIRP resolution time: ~602 days (statutory cap: 330 days)
- Ongoing CIRPs beyond 270 days: ~78% of total
- Recovery rate: ~33% of admitted claims; 171% of liquidation value
- New 14-day NCLT admission rule: applies where default established via Information Utility records
- New CIIRP timeline: 150 days
- New plan approval timeline: 30 days for CoC to approve/reject
- PPIRP eligibility: MSMEs; timeline: 120 days
- IBC total stressed asset resolution since inception: over ₹3.5 lakh crore
- Adjudicating authority: NCLT (companies), DRT (individuals/partnerships)
- Regulator: Insolvency and Bankruptcy Board of India (IBBI)
- CoC approval threshold: 66% vote