Home / Business and Economy / IBC Reforms: Group Insolvency, Cross-Border Rules Unveiled
IBC Reforms: Group Insolvency, Cross-Border Rules Unveiled
28 Jan
Summary
- New IBC amendment introduces group and cross-border insolvency.
- Reforms aim to expedite resolutions and improve creditor recovery rates.
- IBC has facilitated realization of Rs 4 lakh crore for creditors.
The Insolvency and Bankruptcy Code (IBC) has been a pivotal reform, enhancing corporate dispute resolution and economic resilience in India. Despite its successes, challenges such as prolonged resolution timelines and capacity issues at the National Company Law Tribunal (NCLT) persist, impacting creditor recoveries.
The proposed seventh amendment, the IBC Amendment Bill 2025, seeks to tackle these critical issues. Key proposals include the introduction of group insolvency, cross-border insolvency processes, and strengthening creditor-initiated insolvency proceedings. These measures are designed to improve efficiency and align India's insolvency regime with global best practices.
Since its 2016 inception, IBC has undergone six amendments, with the Department of Financial Services actively working to expedite processes. As of September 2025, resolution plans for 1,300 corporate debtors have been approved, resulting in creditors realizing about Rs 4 lakh crore. This has contributed to a decline in gross NPA ratios for scheduled commercial banks.
The deterrent effect of potential loss of control is motivating debtors to settle dues proactively. Notably, 30,310 applications for Corporate Insolvency Resolution Process (CIRP) with a default of Rs 13.78 lakh crore were resolved before NCLT admission by March 2025.
