New Delhi: The proposed amendments to the insolvency law, once ratified by Parliament, will better align the Indian bankruptcy system with the global regime and further bolster the rescue of stressed firms, Insolvency and Bankruptcy Board of India (IBBI) chairman Ravi Mital said on Wednesday.
About 32,000 applications involving underlying debt of more than ₹14.5 lakh crore have been withdrawn so far since the Insolvency and Bankruptcy Code (IBC) came into being in late 2016, Mital said, highlighting that the law has improved credit discipline and tilted the resolution process in favour of creditors.
The withdrawal of applications before the cases are admitted by the adjudicating authority suggests creditors have either recovered money from debtors or forced them to settle dues just by posing the IBC threat, experts have said. Defaulting promoters run the risk of losing control of companies once insolvency cases are admitted by the National Company Law Tribunal (NCLT).
"We have (proposed)... about 68-70 amendments to the law. We are hoping that once these amendments are brought about by our Parliament, our performance would improve even further," Mital said. He was speaking at an event organised by the IBBI and Insol India in the capital.
The government had, in August last year, introduced a bill in the Lok Sabha to amend the IBC, proposing amendments, including a creditor-led resolution process to cut delays and provisions for cross-border and group insolvency frameworks. The bill was then referred to a select House committee, which submitted its report last month.
'IBC a game changer'
Speaking on the occasion, financial Services Secretary M Nagaraju said the almost 10-year law has transformed the bankruptcy ecosystem and proved to be a game changer by fostering transparency and efficiency in corporate stress resolution. It has led to the resolution of 1,300 stressed firms, enabling creditors to recover about ₹4 lakh crore in such cases until September 2025, he underscored.
"Despite these achievements, several challenges still remain, which include timelines of resolutions and liquidations, resulting in value deterioration, low realisations to creditors and capacity constraints at NCLT," Nagaraju said.
He also flagged delays in the periodic review of large accounts of state-run banks at various stages of the insolvency process, and called on lenders for collaboration with the IBBI to expedite the process.
About 32,000 applications involving underlying debt of more than ₹14.5 lakh crore have been withdrawn so far since the Insolvency and Bankruptcy Code (IBC) came into being in late 2016, Mital said, highlighting that the law has improved credit discipline and tilted the resolution process in favour of creditors.
The withdrawal of applications before the cases are admitted by the adjudicating authority suggests creditors have either recovered money from debtors or forced them to settle dues just by posing the IBC threat, experts have said. Defaulting promoters run the risk of losing control of companies once insolvency cases are admitted by the National Company Law Tribunal (NCLT).
"We have (proposed)... about 68-70 amendments to the law. We are hoping that once these amendments are brought about by our Parliament, our performance would improve even further," Mital said. He was speaking at an event organised by the IBBI and Insol India in the capital.
The government had, in August last year, introduced a bill in the Lok Sabha to amend the IBC, proposing amendments, including a creditor-led resolution process to cut delays and provisions for cross-border and group insolvency frameworks. The bill was then referred to a select House committee, which submitted its report last month.
'IBC a game changer'
Speaking on the occasion, financial Services Secretary M Nagaraju said the almost 10-year law has transformed the bankruptcy ecosystem and proved to be a game changer by fostering transparency and efficiency in corporate stress resolution. It has led to the resolution of 1,300 stressed firms, enabling creditors to recover about ₹4 lakh crore in such cases until September 2025, he underscored.
"Despite these achievements, several challenges still remain, which include timelines of resolutions and liquidations, resulting in value deterioration, low realisations to creditors and capacity constraints at NCLT," Nagaraju said.
He also flagged delays in the periodic review of large accounts of state-run banks at various stages of the insolvency process, and called on lenders for collaboration with the IBBI to expedite the process.