The President of India has approved the Insolvency and Bankruptcy Code (Amendment) Act, 2026 set to bring in significant changes to the insolvency regulations to improve processing efficiency and reduce hurdles.
The changes include timelines for insolvency process applications, approval and implementation of resolution plans and the liquidation process. The amendment has yet to take effect and the government will issue a notification later when different provisions will be enforced.
The adjudicating authority has 14 days to admit or reject an application to initiate the corporate insolvency resolution process (CIRP), and the applicant has an opportunity to make any required corrections seven days after receiving notificcation. To withdraw an admitted application, a resolution professional (RP) needs to file an application with 90% approval from the committee of creditors (CoC).
An admitted application cannot be withdrawn if the invitation for submission of a resolution plan has been issued.
The RP requires 60% approval from the CoC for a resolution plan to apply for its implementation. After the resolution plan is approved, the adjudicating authority has 30 days from the approval date of implementation of the resolution plan to approve the manner of distribution.
The CoC will supervise the liquidation process of a corporate debtor. The adjudicating authority has 30 days from receipt of a liquidation process intimation or application to pass a liquidation order. Where such an order is passed, the authority will appoint the insolvency professional recommended by the Insolvency and Bankruptcy Board of India as the liquidator.
Among other changes, the amendment includes the scope for cross-border insolvency by empowering the central government to make rules for it under the new laws.
