The Lok Sabha on Monday passed the Insolvency and Bankruptcy Code (Amendment) Bill, 2025 by voice vote, introducing changes to streamline corporate insolvency proceedings and address procedural bottlenecks.

The bill, piloted by Nirmala Sitharaman, seeks to refine the framework established under the Insolvency and Bankruptcy Code (IBC), 2016.

Key Announcements / Highlights

Lok Sabha passes IBC Amendment Bill 2025
Introduces 12 changes, largely based on select committee recommendations
Aims to reduce delays and resolve interpretation disputes
Replaces underused fast-track insolvency process
Introduces creditor-led and out-of-court resolution mechanisms

Official Statement
Replying to the debate, the Finance Minister said the IBC was designed not merely for debt recovery but to revive viable businesses and preserve economic value.

She highlighted that the amended bill incorporates recommendations from a parliamentary select committee to improve clarity and efficiency in insolvency proceedings.

The government also noted that by December 2025, the IBC had helped resolve over 1,300 companies, enabling creditors to recover approximately ₹4.11 lakh crore.

Context / Background
The Insolvency and Bankruptcy Code, enacted in 2016, provides a time-bound process to resolve insolvency for companies and individuals.

Over time, stakeholders have raised concerns about delays and ambiguities in implementation, prompting the need for amendments.

The new bill replaces the earlier fast-track insolvency process—primarily intended for small businesses—with a revised framework that includes creditor-initiated proceedings and out-of-court settlements.

Public Impact
The amendments are expected to improve efficiency in resolving stressed assets, benefiting banks, financial institutions and businesses.

Faster resolution processes could help reduce non-performing assets (NPAs) and strengthen the overall financial system.

For businesses facing financial distress, the revised framework may offer more flexible options for restructuring and recovery.

Conclusion
The passage of the IBC Amendment Bill 2025 marks another step in refining India’s insolvency framework.

The bill will now move to the Rajya Sabha for further consideration, as policymakers continue efforts to strengthen the country’s financial and corporate resolution systems.

Input & Images : Hindusthan Samachar

Last Updated on: Monday, March 30, 2026 5:26 pm by Monisha Angara | Published by: Monisha Angara on Monday, March 30, 2026 5:26 pm | News Categories: India