Cabinet gives nod for amendments to Insolvency and Bankruptcy Code

New Delhi, March 10 (IANS) The Union Cabinet has given its approval for amendments to the Insolvency and Bankruptcy Code, potentially clearing the way to introduce the IBC Amendment Bill in the ongoing parliamentary session, according to sources.

The proposed legislative updates are based on the recommendations of a Select Parliamentary Committee chaired by Bharatiya Janata Party MP Baijayant Panda.

The committee was tasked with reviewing the current bankruptcy framework. Upon completion, the committee submitted its comprehensive report in December 2025 with a central focus on speeding up the corporate resolution process.

In order to tackle the delays that are plaguing the current system, the parliamentary committee has recommended the implementation of stricter timelines for the disposal of bankruptcy cases. Along with the more stringent deadlines, the committee has now suggested granting enhanced powers to the Committee of Creditors (CoC), thus empowering lenders to drive faster and more decisive resolutions.

In addition, the proposed amendments also address gaps in the existing code by introducing two major structural frameworks. Firstly, the select committee has proposed a dedicated mechanism for cross-border insolvency in order to better manage distressed companies with international assets and foreign creditors.

Secondly, it suggested a formal group insolvency framework, which would allow interconnected corporate conglomerates to undergo resolution as a single unit rather than through fragmented, individual proceedings.

The amendments come under the purview of the Ministry of Corporate Affairs, which oversees the implementation of both laws.

In August last year, the ministry introduced a Bill in the Lok Sabha proposing several changes to the IBC, including measures to shorten the timeline for admission of insolvency resolution applications. The Bill was subsequently referred to the Select Committee headed by Panda, which submitted its report in December 2025.

Finance and Corporate Affairs Minister Nirmala Sitharaman indicated last month that the government plans to formally introduce the IBC (Amendment) Bill, 2025, in the second half of the Budget session, which began on Monday.