Parliament passes amendments to IBC to quicken resolution process, reduce backlog

New Delhi: Parliament on Wednesday passed amendments to the Insolvency and Bankruptcy Code (IBC) to provide faster resolutions, reduce case backlog and strengthen the financial ecosystem.

The Rajya Sabha passed the Insolvency and Bankruptcy Code (Amendment) Bill, 2026, with a voice vote. It had received the Lok Sabha approval on March 30.

Replying to a short discussion on the bill in the Rajya Sabha, Finance Minister Nirmala Sitharaman said the IBC has contributed to the health of the Indian banking sector and helped recover assets.


Sitharaman, who is also the Minister of Corporate Affairs, said all 11 recommendations made by a Lok Sabha Select Committee were accepted by the government.

In addition, one more recommendation of the Ministry of Corporate Affairs was added to it.

On August 12, 2025, the government introduced the bill in the Lok Sabha to amend the Insolvency and Bankruptcy Code (IBC), proposing a raft of changes, including provisions to reduce the time taken for admission of insolvency resolution applications.

The bill was referred to a select committee of the Lok Sabha, which submitted its report in December 2025.

In FY2017-18, for every 1 company resolved, 5 companies went into liquidation. However, in FY2024-25, this ratio has now substantially improved and has come close to 1, she said.

Scheduled Commercial Banks (SCBs) have recovered a total of Rs 1,04,099 crore through various channels, and out of the total amount, the IBC channel alone contributed a significant Rs 54,528 crore, accounting for 52.3 per cent of the total recoveries.