{"id":70715,"date":"2026-04-02T18:25:33","date_gmt":"2026-04-02T12:55:33","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=70715"},"modified":"2026-04-02T18:26:07","modified_gmt":"2026-04-02T12:56:07","slug":"insolvency-bankruptcy-bill","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/02-04-2026\/insolvency-bankruptcy-bill","title":{"rendered":"Parliament Passes Insolvency and Bankruptcy Code Bill, 2026"},"content":{"rendered":"\n<p><strong>Syllabus: GS2\/ Governance, GS3\/ Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Parliament has passed the Insolvency and Bankruptcy Code (Amendment) Bill, 2026.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What is Insolvency and Bankruptcy Code (IBC), 2016?<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>IBC was introduced in 2016<\/strong> to address rising Non Performing Assets and ineffective debt recovery mechanisms in India.<\/li>\n\n\n\n<li>It aims to overhaul the <strong>corporate distress resolution system<\/strong>, replacing debtor-controlled regimes with <strong>creditor-in-control mechanisms<\/strong> for time-bound resolutions.<\/li>\n\n\n\n<li>Objectives of the IBC resolution are;\n<ul class=\"wp-block-list\">\n<li><strong>Business Revival: <\/strong>To save businesses through restructuring, changes in ownership, or mergers,<\/li>\n\n\n\n<li><strong>Maximization of Asset Value:<\/strong> To preserve and maximize the value of the debtor&#8217;s assets,<\/li>\n\n\n\n<li><strong>Promoting Entrepreneurship and Credit:<\/strong> To encourage entrepreneurship, improve credit availability, and balance the interests of stakeholders, including creditors and debtors.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Key Features of IBC (Amendment) Bill, 2026<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Timelines for liquidation: <\/strong>\u00a0The Bill adds that NCLT must pass the order for liquidation within <strong>30 days<\/strong> from the date of the application or intimation.\u00a0 It also specifies that liquidation proceedings must be completed in <strong>180 days<\/strong>, extendable by up to <strong>90 days.<\/strong><\/li>\n\n\n\n<li><strong>Mandatory Admission of CIRP: <\/strong>The bill mandates that the <strong>National Company Law Tribunal (NCLT)<\/strong> must admit an insolvency application <strong>within 14 days<\/strong> if the default is proven and the application is complete,<strong> removing judicial discretion<\/strong> on this timeline.<\/li>\n\n\n\n<li><strong>Cross-Border Insolvency:<\/strong> Introduces a framework to deal with insolvency cases involving foreign assets\/creditors.<\/li>\n\n\n\n<li><strong>Clarification on Statutory Dues:<\/strong> The Bill clarifies that statutory dues will not be treated as secured debt. This ensures that <strong>government dues do not get priority <\/strong>over secured creditors during insolvency resolution.<\/li>\n\n\n\n<li><strong>Changes in Liquidation Process: <\/strong>The Bill removes the <strong>quasi-judicial powers of the liquidator<\/strong> regarding admission, rejection, and valuation of claims.\n<ul class=\"wp-block-list\">\n<li><strong>The Committee of Creditors (CoC)<\/strong> is empowered to appoint or remove the liquidator and supervise the liquidation process.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Introduction of CIIRP (Creditor-Initiated Insolvency Resolution Process): <\/strong>The Bill introduces a mechanism allowing select financial institutions to initiate insolvency proceedings outside the formal court process.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What are the Concerns?<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Dilution of Liquidator\u2019s Role:<\/strong> The Code originally provided quasi-judicial powers to the liquidator to ensure finality of claims during liquidation.\n<ul class=\"wp-block-list\">\n<li>The removal of these powers may reduce efficiency and increase dependence on the CoC, potentially leading to delays and conflicts.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Selective Access to CIIRP: <\/strong>The CIIRP mechanism can be initiated only by select financial institutions notified by the government.\n<ul class=\"wp-block-list\">\n<li>This raises concerns regarding unequal treatment of creditors and lack of clarity on selection criteria.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Restrictions on Withdrawal of Applications:<\/strong> The Bill restricts withdrawal of insolvency applications before CoC formation and after invitation of resolution plans.\n<ul class=\"wp-block-list\">\n<li>This may discourage early settlements and out-of-court resolutions.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Concluding remarks<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The 2026 amendments represent a significant evolution of the IBC framework by improving efficiency, enhancing creditor participation, and incorporating global best practices.<\/li>\n\n\n\n<li>Effective implementation and institutional capacity will be crucial to realise the full potential of these reforms.<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/www.newsonair.gov.in\/parliament-passes-insolvency-and-bankruptcy-code-bill-2026\/#:~:text=The%20Parliament%20has%20passed%20the,Insolvency%\" target=\"_blank\" rel=\"noopener\"><strong>AIR<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p><strong> Context <\/strong><\/p>\n<li class=\"ms-5\"> The Parliament has passed the Insolvency and Bankruptcy Code (Amendment) Bill, 2026. <\/li>\n<p><\/p>\n<p><strong> What is Insolvency and Bankruptcy Code (IBC), 2016? <\/strong><\/p>\n<li class=\"ms-5\"> IBC was introduced in 2016 to address rising Non Performing Assets and ineffective debt recovery mechanisms in India. <\/li>\n<li class=\"ms-5\"> It aims to overhaul the corporate distress resolution system, replacing debtor-controlled regimes with creditor-in-control mechanisms for time-bound resolutions. <\/li>\n<p><a href=\" https:\/\/www.nextias.com\/ca\/current-affairs\/02-04-2026\/insolvency-bankruptcy-bill \" class=\"btn btn-primary btn-sm float-end\">Read More<\/a><\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-70715","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/70715","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=70715"}],"version-history":[{"count":2,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/70715\/revisions"}],"predecessor-version":[{"id":70717,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/70715\/revisions\/70717"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=70715"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=70715"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=70715"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}