New Delhi [India], August 12 (ANI): A bill introducing a “creditor-initiated insolvency resolution process” with an out-of-court initiation mechanism for genuine business failures—aimed at facilitating faster and more cost-effective insolvency resolutions—was introduced in the Lok Sabha on Tuesday.
Finance Minister Nirmala Sitharaman presented the Insolvency and Bankruptcy Code (Amendment) Bill, 2025, amid opposition uproar over demands for a debate on the Special Intensive Revision of electoral rolls in Bihar. Sitharaman proposed sending the bill to a Select Committee, a motion that was approved by the House.
According to the Statement of Objects and Reasons, the proposed amendments aim to reduce delays, maximize value for all stakeholders, and improve governance of processes under the Code. They seek to modify existing provisions to align with the Code’s objectives and introduce new provisions based on global best practices for resolving insolvency.
Among other measures, the legislation introduces a creditor-initiated insolvency resolution process with an out-of-court mechanism for genuine business failures to speed up resolutions and minimize business disruption. Once implemented, this is expected to ease the burden on judicial systems, improve the ease of doing business, and enhance access to credit.
The bill also proposes frameworks for “group insolvency” and “cross-border insolvency.” The group insolvency framework aims to efficiently resolve cases involving complex corporate group structures, minimizing value loss from fragmented proceedings and maximizing creditor returns through coordinated decision-making.
The cross-border insolvency framework seeks to protect stakeholder interests in both domestic and foreign proceedings, promote investor confidence, and align Indian practices with international standards. It is also expected to improve recognition of Indian insolvency proceedings in other jurisdictions, according to the statement. (ANI)
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