Insolvency law to further improve with amendments getting passed by Parliament IBBI chief

New Delhi, Jan 28 (PTI) With the proposed amendments to insolvency law getting Parliament's approval, there would be further enhancement in the timelines and effectiveness of proceedings as well as alignment of India's insolvency regime more closely with the global best practices, IBBI Chairperson Ravi Mital said on Wednesday.
     Observing that the Insolvency and Bankruptcy Code (IBC) has done well in the last 10 years, he said it has changed the debtor-creator relationship and companies and promoters are afraid of getting into insolvency after IBC.
     Citing instances, he said, about 32,000 applications have been withdrawn and the underlying debt of more than Rs 14.5 lakh crore has been settled.
     This is the fear and effectiveness of IBC that people are just settling, he said, adding that earlier the default period was about 250 days, which has now been reduced to 80 days.
     "We had made a set of amendments... I think about 68-70 amendments to our law. These amendments are before Parliament. We are hoping that once these amendments are brought about by our Parliament, our performance would improve even further," he said, while addressing an event organised by IBBI and Insol India.
     On August 12, 2025 the government introduced a 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, which was referred to a select committee of the Lok Sabha, has also submitted its report last month.
     The Code, introduced in 2016, has undergone six legislative interventions since its enactment and the last amendment was made in 2021.
     "We would be introducing several new concepts like cross-border, open-solvency, out-of-court settlement processes. We will be introducing these things with our new law," he said.
     The Insolvency and Bankruptcy Board of India (IBBI) is a key institution in implementing the IBC that provides for a market-linked and time-bound resolution of stressed assets.
     Mital expressed hope that S&P would be forced to put India into its number one rating category (Group A) in the time to come.
     Last year, global rating agency S&P revised up its jurisdiction ranking assessment for India's insolvency regime on improved creditor-friendliness of India's bankruptcy resolution framework.
     It said the IBC has strengthened credit discipline and tilted the resolution process in favour of creditors, with promoters potentially risking losing control of their business, unlike under earlier resolution regimes.
     S&P Global Ratings revised up its jurisdiction ranking assessment for India's insolvency regime to Group B from Group C following an upward revision of its assessment of the creditor-friendliness of India's bankruptcy resolution framework to medium from weak.

(This story has not been edited by THE WEEK and is auto-generated from PTI)