The Parliamentary Select Committee reviewing the Insolvency and Bankruptcy Code (Amendment) Bill 2025 has submitted its comprehensive report, proposing over 70 amendments to the existing IBC framework — marking the first major overhaul of the Code since 2019. The report, analysed by PRS Legislative Research, introduces several structural reforms to India's insolvency resolution architecture.
Key reforms proposed include: (1) Creditor-initiated insolvency proceedings, allowing financial creditors to trigger the Corporate Insolvency Resolution Process (CIRP) more efficiently, streamlining the initiation mechanism; (2) A group insolvency framework enabling coordinated resolution of connected companies within the same corporate group, which has been a longstanding gap in Indian insolvency law; (3) Cross-border insolvency provisions aligned with the UNCITRAL Model Law on Cross-Border Insolvency, facilitating recognition of foreign insolvency proceedings in India and vice versa — critical for multinational corporations with assets in multiple jurisdictions.
The IBC was originally enacted in 2016 to consolidate laws relating to insolvency of companies and limited liability entities. Since its inception, resolution rates and timelines have been debated — with the average resolution time exceeding 600 days in many cases, well above the originally envisaged 270 days. The 2025 amendments aim to improve operational efficiency, address jurisprudential gaps exposed by landmark Supreme Court rulings, and align India with global insolvency standards. The UNCITRAL Model Law alignment is particularly significant as it positions India as an FDI-friendly destination with predictable cross-border insolvency rules.