New Delhi, March 30: The Lok Sabha has approved the Insolvency and Bankruptcy Code (Amendment) Bill on Monday. This legislation aims to expedite the resolution of cases involving companies undergoing bankruptcy.
The bill establishes a mandatory 14-day timeframe for accepting bankruptcy applications once a company is declared in default.
Finance Minister Nirmala Sitharaman stated that the government has proposed 12 amendments to strengthen the resolution framework within the Insolvency and Bankruptcy Code.
Sitharaman highlighted that delays in the Insolvency and Bankruptcy Code (IBC) resolution process are primarily due to extensive litigation. The bill includes provisions to penalize the misuse of the IBC process.
The Lok Sabha discussed the bill on March 27, after it was previously sent to a selection committee. This legislation aims to address delays in resolving bankruptcy-related matters for companies or individuals.
Sitharaman noted that the IBC has played a crucial role in improving the banking sector’s health. She emphasized that the law was never intended to serve merely as a debt recovery mechanism.
While presenting the bill, the Finance Minister remarked that the IBC has contributed to better loan discipline and improved the credit profiles of companies.
She stated that companies have performed well after exiting the bankruptcy resolution process, demonstrating enhanced corporate governance practices.
Sitharaman’s comments were in response to the selection committee’s report on the Insolvency and Bankruptcy Code (Amendment) Bill, 2025.
She remarked, “The Insolvency and Bankruptcy Code, implemented in 2016, has been a key factor in improving the overall health of the Indian banking sector.” She further noted that this framework has also helped companies achieve better credit ratings over time.
Additionally, she clarified that the law aims to resolve distressed assets, not just recover outstanding amounts.
She emphasized, “The IBC is a framework to address financial crises while preserving the value of viable businesses. It was never intended to be a tool for debt recovery.”
My name is Narendra Jijhontiya. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including TECHNOLOGY, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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