Finance Minister Nirmala Sitharaman on Saturday defended the Insolvency and Bankruptcy Code (IBC) against criticism over recovery rates, asserting in the Rajya Sabha that the framework is designed primarily for resolution and value maximisation rather than mere recovery.
Citing official data, she said the IBC has enabled the resolution of 1,376 companies, with creditors recovering ₹4.11 lakh crore. Financial creditors, she added, have realised over 64% of their claims through the process.
She also informed the House that commercial banks have recovered more than ₹1.04 lakh crore from non-performing assets (NPAs), of which over ₹54,528 crore has come through the IBC route.
Amendment Bill clears Parliament
Parliament has passed the Insolvency and Bankruptcy Code (Amendment) Bill, 2026, with the Rajya Sabha approving it after the Lok Sabha cleared it on March 30. The amendments seek to plug procedural gaps, reduce delays, and align the framework with evolving global practices.
Among the key changes is the expansion of the look-back period for avoidance transactions to two years before the filing of insolvency petitions. The law also mandates that the Committee of Creditors (CoC) record reasons for selecting the successful resolution applicant, a move aimed at enhancing transparency.
The amendments introduce stricter timelines for adjudicating authorities, requiring written explanations if applications are not disposed of within 14 days. They also clarify withdrawal rules, enable restoration of CIRP before liquidation with creditor approval, and pave the way for cross-border and group insolvency frameworks.
Timelines still stretched: IBBI data
According to the Insolvency and Bankruptcy Board of India (IBBI), the 1,376 CIRPs that yielded resolution plans by December 2025 took an average of 619 days to conclude, excluding permitted extensions. Cases ending in liquidation averaged 527 days, while completed liquidation processes took about 675 days.
Voluntary liquidation cases were relatively faster, closing in an average of 394 days. Till FY25, 1,194 CIRPs resulted in resolution plans, with creditors realising ₹3.89 lakh crore—32.76% of admitted claims but 170.09% of liquidation value.
Experts underline impact, raise caution
Legal and insolvency experts said the latest amendments represent a significant step toward improving the effectiveness of the IBC, though execution challenges persist.
Akshat Pande, Managing Partner, Alpha Partners, said the changes reflect a deliberate attempt to tighten timelines while preserving commercial flexibility. “By discouraging frivolous interim applications and reinforcing adherence to statutory timelines, the law seeks to curb dilatory tactics frequently employed by corporate debtors and ensure timely commencement of the corporate insolvency resolution process,” he said.
Supriya Majumdar, Partner, Elarra Law Offices, said the codification of the “clean slate” principle addresses a long-standing issue where authorities and creditors continued to pursue claims even after resolution plans were approved.
“While the amendment seeks to curb the delays in initiation of insolvency, resolution, liquidation and dissolution processes, with stricter timelines and reasons to be provided for delay, the challenges may still remain with the existing back-log of cases and strength of the Benches of NCLT,” she added.
She added that the amendments are likely to ease governance-related challenges and improve structural efficiency.
Saurav Agrawal, Advocate, Delhi High Court, said the amendments provide stronger legal backing to prioritise the revival of corporate debtors. “The Amendment attempts to resolve the long-pending issues, which generally stall the CIRP or Liquidation process, like filling of claims by statutory authorities as secured creditors or opposition from dissenting financial creditors to the approved resolution plan, or initiation of proceedings against successful resolution applicants post approval of the resolution plan.
He added that the amendment in IBC aims to provide a faster, more robust mechanism for the successful completion of CIRP or Liquidation process”.
Adrija Mishra, Advocate-on-Record, Supreme Court, said the emphasis on stricter timelines and mandatory recording of reasons for delays would improve accountability across stakeholders. “Stricter timelines and requirements to give reasons for any delay would, on effective implementation, bring in more accountability for all the stakeholders involved in the insolvency process,” she said.
She noted that the admission of CIRP, timelines for withdrawal and finality of the plan will prevent the CIRP from being reduced into a recovery mechanism and would rather reinforce the intention of the legislature towards effective recovery of the corporate debtor.
The amendments are expected to streamline insolvency proceedings and improve transparency, while addressing structural inefficiencies that have emerged over time. However, experts stress that their success will depend on effective implementation and the ability of adjudicating institutions to manage rising caseloads.
