Proposed IBC amendments to expedite resolution of stressed companies: IBBI Chairman

New Delhi: Insolvency and Bankruptcy Board of India (IBBI) chairman Ravi Mital said on Friday that the planned amendments to the bankruptcy law will lead to faster resolution of stressed companies.

Finance and corporate affairs minister Nirmala Sitharaman introduced amendments to the Insolvency and Bankruptcy Code (IBC) last week with a framework for creditor-initiated resolution involving mostly out-of-court processes. The amendments also proposed frameworks for cross-border insolvency and corporate group bankruptcy.

The amendment bill presented in the Lok Sabha was referred to a select committee. These were the first set of amendments to the IBC moved by the government since 2021.


Speaking at an Assocham event in the national capital, Mital said once the amendments become effective, time taken for the resolution of insolvent firms is expected to come down. He also flagged delays in the admission of insolvency cases as a key challenge.

The law mandates that insolvency applications be admitted within 14 days, but it currently takes an average of 434 days. So, by the time a case is admitted, much of the insolvent firm's value is eroded. Mital also underscored the importance of strong coordination between the committee of creditors and the resolution professional of a bankrupt company to speed up the resolution process.

The head of the insolvency regulator exhorted key stakeholders, including consultants, advisors, bankers and creditors, to support the development of a stronger insolvency framework for the future, according to an Assocham release.