Insolvency and Bankruptcy Code (Amendment) Bill introduced in Lok Sabha, to be examined by Select Committee

Finance Minister Nirmala Sitharaman introduced the Insolvency and Bankruptcy Code (Amendment) Bill, 2025' amid uproar by opposition members over their demand for debate on Special Intensive Revision of electoral rolls in Bihar.

Sitharaman proposed sending the Insolvency and Bankruptcy Code (Amendment) Bill, 2025 to a Select Committee. The motion was approved by the House.

According to the statement of Objects and Reasons of the bill, the proposed amendments aim to reduce delays, maximise value for all stakeholders, and improve governance of all processes under the Code. They seek to modify existing provisions to better align with the overall objectives of the Code and to introduce new provisions that follow global best practices for resolving insolvency.

"Among other measures, the proposed legislation introduces a "creditorinitiated insolvency resolution process" with an out-of-court initiation mechanism for genuine business failures to facilitate faster and more cost-effective insolvency resolution, with minimal business disruption. Once implemented, this will help ease the burden on judicial systems, promote ease of doing business and improve access to credit," he said.

The proposed legislation also introduces provisions for "group insolvency" and "cross-border insolvency".

The group insolvency framework seeks to efficiently resolve insolvencies involving complex corporate group structures, minimising value destruction caused by fragmented proceedings and maximising value for creditors through coordinated decision-making.

The cross-border insolvency framework seeks to lay the foundation for protecting stakeholder interests in domestic and foreign proceedings, promoting investor confidence and aligning domestic practices with international best practices. This will also pave the way for improved recognition of Indian insolvency proceedings in other jurisdictions, the statement said. (ANI)