The recent passage of the Insolvency and Bankruptcy Code (Amendment) Bill, 2026 marks a significant step in the evolution of India’s insolvency framework, with policymakers and legal experts pointing to a sharper focus on transparency, accountability and time-bound resolution.
While concerns have been raised by some members over low recovery rates under the Code, Finance Minister Nirmala Sitharaman firmly rejected the criticism, stating, such criticism misunderstands the very purpose of the law.
Citing official data, she said, that the IBC has facilitated the resolution of one thousand 376 companies, enabling creditors to recover 4.11 lakh crore rupees with financial creditors recovering more than 64% of their claims under the process.
On banking sector recoveries, she said that the commercial banks have recovered a total of over one lakh four thousand crore rupees from NPAs, and out of this, the IBC alone contributed more than 54 thousand 528 crore rupees.
The amendments to the Insolvency and Bankruptcy Code, 2016 aim to address procedural delays and interpretational gaps, while incorporating global best practices and lessons from nearly a decade of implementation.
Explaining the rationale, Sitharaman said that the government has brought the amendments to further strengthen the existing insolvency framework further explaining that the changes are intended to address practical challenges, incorporate evolving global best practices, and reflect the experience gained since the law’s implementation in 2016.
Among key changes, the look-back period for avoidance transactions has been expanded. The minister said the look-back period for avoidance transactions has been expanded to two years prior to the date on which the insolvency petition is filed before the adjudicating authority.
A major transparency measure has also been introduced for the Committee of Creditors (CoC). Sitharaman said that the Committee of Creditors will be required to record the reasons for selecting the successful resolution applicant calling it an important reform that will make the process more transparent and remove doubts in the minds of stakeholders.
Highlighting enforcement efforts, she added that the stringent action under the Fugitive Economic Offenders Act and the Prevention of Money Laundering Act has led to major recoveries for public sector banks and stronger accountability in large fraud cases.
Tighter timelines, clearer processes
The amendments introduce a strict 14-day timeline for admission of applications under Sections 7, 9 and 10, with adjudicating authorities required to record reasons for any delay. Clearer parameters for admission and withdrawal of cases are expected to reduce litigation and ambiguity.
Changes to Section 19 widen the obligation of cooperation to include past personnel of the corporate debtor, while reforms in the appointment of resolution professionals aim to enhance institutional oversight.
Importantly, adjudicating authorities can now return defective resolution plans to the CoC instead of rejecting them outright—seen as a move to preserve value and avoid unnecessary liquidation.
Data shows progress, but delays persist
According to the Insolvency and Bankruptcy Board of India, 1,376 CIRPs yielding resolution plans by December 2025 took an average of 619 days to conclude, excluding excluded periods. These processes incurred an average cost of 1.30% of liquidation value and 0.77% of resolution value.
Meanwhile, 2,952 CIRPs ending in liquidation took 527 days on average, while completed liquidation processes averaged 675 days. Voluntary liquidations closed faster, at 394 days on average.
The IBBI noted, “The Code endeavours to close the various processes at the earliest.” It added, “Till FY 2024-25, 1194 CIRPs had yielded resolution plans. The creditors realised Rs. 3.89 lakh crore under the resolution plans. The realisation to the creditors was 32.76% and 170.09% as against their admitted claims and liquidation value, respectively.”
Experts back ‘second-generation’ reforms
Legal experts say the amendments reflect a deeper structural shift in the insolvency regime, with multiple provisions aimed at improving both process efficiency and outcome certainty.
Amir Bavani, Founder, AB Legal, said, “The amendments brought about by the Parliament must be viewed as a welcome change, put into motion by a concerted look at the needs of the hour as the IBC has evolved.” He added, “The amendments are focused on creating a water-tight, streamlined and structured insolvency framework which will promote more accountability, transparency and apprehend, at least the likelihood of, the provisions of the Code being misused.”
Highlighting procedural clarity, he noted, “Applications under Sections 7, 9, and 10 now have a clear 14-day mandate to be adjudicated upon. This would not only effectuate timely CIRP admissions but also obliviate chances of future litigation.” On value maximisation, he said, “the Parliament has made a big step towards aligning the text of the Code with its inherent ethos – Value Maximisation.”
Ravi Bhasin, Senior Partner at AZB & Partners, said, “The amendments to the Insolvency and Bankruptcy Code mark a decisive shift in India’s insolvency framework.” He emphasised, “The introduction of the creditor-initiated insolvency resolution process is particularly significant—it allows a qualified majority of financial creditors to drive a time-bound, out-of-court resolution.”
On group insolvency, he added, “Equally important is the formal recognition of group insolvency, which addresses long-standing inefficiencies and enables coordinated proceedings to prevent value destruction across group entities.” Summing up, he said, “these reforms represent one of the most comprehensive evolution of the Code to date, with a clear emphasis on speed and value preservation.”
Calling the amendments “one of the most comprehensive evolutions of the Code to date,” he said, “Taken together with the cross-border framework, mandatory 14-day admission timelines, codification of the clean-slate principle, and distribution safeguards for dissenting creditors, these reforms represent one of the most comprehensive evolutions of the Code to date, with a clear emphasis on speed and value preservation.” He added, “That said, as with any structural reform, the true test will lie in how these provisions are implemented and interpreted in practice.”
Raheel Patel, Partner at Gandhi Law Associates, said, “The 2026 IBC amendments signal a clear policy pivot from pure resolution timelines to process credibility and outcome certainty.” He added, “By tightening admission thresholds, clarifying roles of regulators like the IBBI, and addressing procedural bottlenecks, the framework becomes less vulnerable to tactical litigation and value erosion.”
However, he cautioned, “the real impact will depend on how these changes are operationalised by the NCLTs and regulators—there is a fine line between filtering misuse and over-curtailing legitimate access.” He concluded, “If implemented well, this could mark a second-generation stabilisation of the IBC; if not, it risks adding another layer of procedural friction.”
With Parliament pushing through wide-ranging changes, the IBC appears set for a more mature phase with balancing speed, transparency and value.
