Govt's IBC overhaul plan to shift power from courtrooms to boardrooms

India's bankruptcy playbook is set for its biggest rewrite since the Insolvency and Bankruptcy Code (IBC) came into force in 2016.

- Gireesh Chandra Prasad

The IBC (Amendment) Bill 2025—tabled in the Lok Sabha on Tuesday by finance and corporate affairs minister Nirmala Sitharaman and referred to a select committee—proposes to shift much of corporate debt resolution from crowded courtrooms to boardroom tables.

The Bill outlines a creditor-led, largely out-of-court insolvency process for quick rescue, faster tribunal timelines, a new framework for group insolvencies and cross-border bankruptcies, and clearer rules on the priority of government dues.

At present, insolvency cases that are meant to be admitted within 14 days take an average 434 days, eroding value for lenders and shareholders.

"The proposed amendments aim to reduce delays, maximize value for all stakeholders, and improve governance," Sitharaman said in a statement tabled along with the Bill.