Context: IBC Amendment 2026
Parliament passed the IBC (Amendment) Bill, 2026 to address delays, low recovery and litigation-heavy processes, aiming to make insolvency resolution time-bound and more efficient.
Key Changes
- What the system is + where the problem was
• IBC (2016) → framework for resolving stressed companies through NCLT (adjudication) and NCLAT (appeals)
• Intended to be time-bound, but faced delays in admission, long appeals, backlog and low recovery - How the amendments speed up resolution
• NCLT must admit cases once default is established → removes entry-stage delays
• NCLAT given 3-month limit → reduces prolonged appeals
• Introduction of creditor-led, out-of-court initiation with 51% approval → reduces court burden - Making the system more practical and flexible
• Group insolvency → handles interconnected companies together
• Cross-border insolvency rules → deals with foreign assets and creditors
• IBBI empowered to fix timelines and standards → better regulation
Fixing distortions and improving outcomes
• Resolution Professional cannot act as liquidator → avoids bias toward liquidation
• Shift from criminal to civil penalties → ensures proportional enforcement
• Broader definition of corporate debtor → wider applicability
