IBC 2.0: A step forward, but not the final word

The Insolvency and Bankruptcy Code (Amendment) Bill, 2025, tabled in Parliament last month, marks yet another decisive step in strengthening India's bankruptcy framework.

- Sunil Kanoria

Since its enactment in 2016, the IBC has transformed how the country deals with corporate distress. We have successfully moved away from the debtor-friendly regimes of the past to a more time-bound, creditor-focused resolution process.

The new amendments promise yet another raft of reforms that address some long-standing bottlenecks. These bottlenecks have slowed down resolutions and, at times, eroded value for stakeholders.

At its core, the Bill seeks to reinforce two pillars of the IBC—speed and certainty. The government has made it amply clear that delays in resolution will not be tolerated. It has mandated the adjudicating authority to decide on insolvency applications within 14 days. It must also approve or reject resolution plans within 30 days. Such predictability attracts investors and ensures that value is not destroyed in prolonged litigation.

The amendments also allow the Committee of Creditors (CoC), who are lenders to the insolvent companies, to supervise liquidation without restarting the claims process. This move aims at reducing procedural redundancies and aligns with the IBC’s spirit of efficiency.

The process of mediation also allows promoters to continue running their companies while restructuring debt. The reform strikes a balance between creditor rights and business continuity.