IBC Amendment Bill 2025 To Address Timeline Lapses, Codify Clean Slate Principle: Baijayant Panda
Addressing misconceptions, Panda said it is wrong to claim that IBC has not taken off, pointing out that banks have recovered Rs 50,000–60,000 crore annually.
The Insolvency and Bankruptcy Code (Amendment) Bill, 2025 will reduce resolution time to 6–7 months which will lead to higher recoveries, Lok Sabha MP Baijayant Panda said on Thursday.
A Select Committee of Lok Sabha, under Panda's leadership, presented a report on the bill to the Lok Sabha this week. The Bill had been introduced in the Lok Sabha in August this year and referred to the Select Committee for examining the Bill and submitting its report to the Parliament.
Panda highlighted several key aspects of the new bill in an exclusive interaction with NDTV Profit. He stated that reducing resolution time to 6–7 months will lead to higher recoveries and emphasized that, for the first time, group insolvency will be introduced.
"The current amendment's top priority is the timeline. Resolutions and liquidations are taking more than two years while the main law stipulated to be within a year. Now the timelines have been made strict and resolutions will happen much faster," he said.
In its recommendations, the Committee has proposed fixing a three-month time limit for the National Company Law Appellate Tribunal (NCLAT) to decide insolvency appeals. This would require an amendment to the relevant section of the Code.
Panda mentioned the inclusion of a pre-packaged process for MSMEs and clarified that when small companies undergo the IBC process, owners can remain on the board under the new provisions.
Addressing misconceptions, the BJP MP said it is wrong to claim that IBC has not taken off, pointing out that banks have recovered Rs 50,000–60,000 crore annually.
He stressed the importance of the “clean slate principle” and reiterated that strict timelines were a top priority in the IBC process. Panda said the NPA situation a decade ago was severe but has improved significantly with the implementation of IBC in 2016.
On the corporate insolvency resolution process (CIRP), the committee proposed widening the definition of a resolution plan to allow more than one resolution plan for a corporate debtor undergoing CIRP.
