Nirmala Sitharaman Presents Insolvency Amendment Bill 2025 in Lok Sabha

The Finance Minister Nirmala Sitharaman has presented a revised bill called the Insolvency and Bankruptcy Code (Amendment) Bill 2025 introduced in the Lok Sabha. This bill proposes changes to the existing Insolvency and Bankruptcy Code (IBC) that governs the insolvency and bankruptcy proceedings for companies, partnership firms, and individuals.

The bill was sent to a select committee of the Lok Sabha for analysis. The Code was first introduced in 2016 and has been revised several times. The Insolvency and Bankruptcy Code was introduced to protect the interests of creditors and stakeholders in a company. The code gives a legal framework to resolve insolvency cases in a fast, time-bound, and structured way.

The Insolvency and Bankruptcy Code (Amendment) Bill 2025 aims to reduce delays, maximise the value of all stakeholders and enhance the governance of all processes under the Code. The key change includes the introduction of a “creditor-initiated insolvency resolution process” with an out-of-court initiation mechanism in genuine business failure cases. This is meant to make the process faster, simpler, and less expensive.

Additionally, the proposed Bill also introduces a set of rules to deal with “cross-border insolvency” and “group insolvency“. Cross-border insolvency is when an insolvent debtor has creditors and assets in more than one country. The new bill aims to make a better framework to protect stakeholders’ interests in domestic and foreign proceedings. This also builds trust for investors and makes sure that indian insolvency proceedings get global recognition.