DFS organises Half-Day Workshop on Insolvency and Bankruptcy (Amendment) Act, 2026

The Department of Financial Services (DFS), Ministry of Finance, organised a half-day workshop on the Insolvency and Bankruptcy (Amendment) Act, 2026 in New ...

What Happened

The Department of Financial Services (DFS), Ministry of Finance, organised a half-day workshop on the Insolvency and Bankruptcy (Amendment) Act, 2026 in New Delhi.
The workshop brought together senior officials from the Ministry of Corporate Affairs (MCA), the Insolvency and Bankruptcy Board of India (IBBI), leading legal experts, and senior executives from banks and financial institutions.
The objective was to deliberate on the impact of recent amendments to the Insolvency and Bankruptcy Code (IBC) on the banking sector and to strengthen stakeholder understanding for implementation.
Key provisions discussed include the Creditor-Initiated Insolvency Resolution Process (CIIRP), group and cross-border insolvency frameworks, new guarantor asset provisions (Section 28-A), and enhanced admission timelines.

Static Topic Bridges

Insolvency and Bankruptcy Code (IBC), 2016 — Origin and Architecture

The IBC 2016 was enacted to consolidate and amend laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms, and individuals. It replaced a fragmented regime across the Companies Act, SICA, SARFAESI, and RDDBFI Act. The Bankruptcy Legislative Reforms Committee (BLRC) headed by T.K. Viswanathan submitted the draft bill in November 2015.

The Corporate Insolvency Resolution Process (CIRP) must be completed within 180 days of admission, extendable by 90 days (total maximum: 330 days, including court time, per 2019 amendment).
The National Company Law Tribunal (NCLT) is the Adjudicating Authority for corporate insolvencies; appeals lie to the NCLAT.
The first CIRP order under the IBC was passed by NCLT in Synergies-Dooray Automotive Ltd. (August 2017).
The IBC also established the Insolvency and Bankruptcy Board of India (IBBI) as the regulator and oversight body.

Connection to this news: The 2026 Amendment Act builds on this framework, introducing structural changes that address delays, cross-border complexities, and creditor-initiation gaps that have accumulated since 2016.

Creditor-Initiated Insolvency Resolution Process (CIIRP) — 2026 Amendment

The 2026 Amendment Act introduces CIIRP, a mechanism that allows notified classes of financial creditors to initiate insolvency resolution without requiring court admission in every case.

Under CIIRP, eligible financial creditors (notified by the Central Government) can directly commence resolution proceedings.
Petitions must be mandatorily admitted when default is proved — eliminating judicial discretion at the admission stage.
The "look-back" period for avoidance transactions (preferential/undervalued transactions that can be reversed) has been extended from one year to two years.
Penalties for frivolous cases have been introduced to discourage misuse.

Connection to this news: CIIRP directly affects banks and financial institutions as the primary class of financial creditors; the DFS workshop aimed to operationalise bank-level understanding of this new initiation mechanism.

Group Insolvency and Cross-Border Insolvency

Group insolvency allows multiple entities within a single corporate group to be resolved jointly in one court, avoiding fragmented proceedings that led to value erosion in cases like Videocon and Jaypee Infratech.

The Central Government can prescribe conditions for cross-border insolvency proceedings, including mutual recognition, relief, judicial co-operation, and coordination.
India had not adopted the UNCITRAL Model Law on Cross-Border Insolvency (1997); the 2026 Amendment creates the legislative basis for its selective adoption.
Group insolvency was recommended by the Insolvency Law Committee in 2020 but enacted only through the 2026 Amendment.

Connection to this news: For banks with exposure to large conglomerates, group insolvency significantly simplifies debt recovery across affiliated entities — a key concern discussed at the DFS workshop.

SARFAESI Act, 2002 and Debt Recovery Ecosystem

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, and the Recovery of Debts Due to Banks and Financial Institutions (RDDBFI) Act, 1993, pre-dated the IBC and remain operational, providing parallel recovery channels.

SARFAESI enables banks to enforce security interest (attached collateral) without court intervention for NPAs above ₹1 lakh.
Debt Recovery Tribunals (DRTs) under the RDDBFI Act handle disputes between ₹10 lakh and the SARFAESI threshold.
The IBC's introduction created a hierarchy: CIRP for resolution; SARFAESI and DRTs for liquidation-track or secured creditor enforcement.

Connection to this news: The IBC Amendment 2026's guarantor asset provisions (Section 28-A) interact with SARFAESI enforcement rights, which was one of the implementation complexities addressed in the DFS workshop.

Key Facts & Data

IBC enacted: 2016 (replaced SICA, provisions of Companies Act, SARFAESI, RDDBFI)
CIRP base timeline: 180 days (max 330 days including court time, per 2019 Amendment)
BLRC Chairman: T.K. Viswanathan (committee report: November 2015)
First NCLT CIRP order: Synergies-Dooray Automotive Ltd., August 2017
IBBI: Regulator established under IBC for insolvency professionals and resolution frameworks
Avoidance transaction look-back period (2026 Amendment): 2 years (up from 1 year)
Group insolvency: recommended by Insolvency Law Committee in 2020, enacted in 2026
New Section 28-A enables transfer of guarantor assets as part of CIRP with Committee of Creditors (CoC) approval
SARFAESI threshold for enforcement: NPAs above ₹1 lakh