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Govt mulls IBC changes to boost fraud recoveries
Financial Express Delhi
|February 13, 2026
Plans IBC amendments for third-party funding Move aims to cut money stuck in disputes Over ₹3.8 lakh cr locked in avoidance cases
THE GOVERNMENT IS mulling amendments to the Insolvency and Bankruptcy Code (IBC) to allow litigation funding or third-party financing in insolvency disputes — a move that could significantly help recover money stuck in preferential, undervalued, fraudulent, and extortionate (PUFE) transactions, an official told FE.
“The discussion is still at an early stage as we evaluate international practices. The changes in the IBC will enable specialised agencies to take over filing and pursuing cases involving PUFE transactions. Given the magnitude of funds locked in such cases, the government felt the need to make necessary changes,” the official said.
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