On August 12, 2025, the Centre tabled the Insolvency and Bankruptcy Code (Amendment) Bill, 2025, in the Lok Sabha. The bill aims to strengthen the implementation of the Insolvency and Bankruptcy Code (IBC) by introducing new provisions designed to improve the resolution process for insolvent businesses.

One of the key proposals in the bill is the introduction of a creditor-initiated insolvency resolution mechanism, allowing creditors to initiate the process outside of court for businesses that have failed genuinely. This is intended to streamline the process, making it faster and more cost-effective.

The amendment also introduces provisions for group insolvency and cross-border insolvency. The cross-border insolvency framework is particularly notable, as it aims to protect stakeholder interests in both domestic and foreign insolvency proceedings. It seeks to boost investor confidence and bring domestic practices in line with international best practices.

The bill also includes measures to address frivolous or vexatious proceedings, imposing penalties on those who initiate such cases to prevent unnecessary delays in the insolvency resolution process.

Additionally, the bill proposes to include liquidators and Interim Resolution Professionals (IRPs) within the existing 10-assignment cap for Resolution Professionals (RPs). This is intended to ensure a more equitable distribution of work, preventing overloading a few entities with too many cases.

Legal experts, such as Ashutosh Narang from CMS INDUSLAW, have suggested that similar safeguards, like capping the number of assignments for Insolvency Professional Entities (IPEs), should be considered to prevent concentration of cases in a few hands.

This bill is seen as a move towards improving the governance of insolvency processes, reducing delays, and aligning with global best practices to maximize value for all stakeholders involved.

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