IBC 2.0 is now law The journey is not over

I had written in these pages last September, when the Insolvency and Bankruptcy Code (Amendment)Bill, 2025 was placed before Parliament, that it was a step forward, but not the final word.

- Sunil Kanoria

The Bill was then passed by both the Houses and received Presidential assent on 6th April. It is law now. And it is a good law. And the government has shown, yet again, that it is willing to listen and keep iterating. IBC has been amended seven times in less than a decade. At least that suggests an unusual degree of institutional responsiveness. This is not a Code sitting on a shelf. It is an evolving scheme, one that is from time to time moulded by experience.

What the Act gets right

The new Act provides a number of long-awaited fixes. Insolvency application must be admitted within 14 days. Decisions of resolution plans within 30 days. A 180-day window for liquidation. A creditor-led insolvency resolution process that shifts commercial judgments from overstretched tribunals to boardrooms. Group insolvency and cross-border frameworks that synchronize India with global practice.

The new rule of a “clean slate” means that once a resolution plan is approved, all past dues and claims are wiped out. This will instill confidence in new investors that they won't be burdened with old liabilities after taking over a company. The IBC has rehabilitated more than 1,370 companies with recoveries of over ₹4 lakh crore, according to the Finance Ministry. The system is working. These amendments should make it function better.

Speed must come with balance