The Insolvency and Bankruptcy Board of India (IBBI) has floated a discussion paper on the regulations pertaining to creditor-initiated insolvency resolution process (CIIRP)--debtor-in-possession model--which proposes the resolution plan of the corporate debtor to be approved by the adjudicating authority within 150 days of commencement, markedly shorter than the timeline of traditional corporate insolvency resolution process (CIRP) of 330 days.

The CIIRP framework has been introduced for the first time under the Insolvency and Bankruptcy Code (IBC), through the new amendment bill, passed by the Parliament earlier this month.
The IBBI is accepting comments on draft regulations, till April 28.
What is CIIRP?
The framework is premised on four core objectives. They are: (a) enabling creditor-led early intervention after default; (b) preserving management control of the corporate debtor subject to appropriate oversight; (c) providing a structured, time-bound pathway to a commercially viable resolution plan; and (d) facilitating seamless conversion to the Corporate Insolvency Resolution Process (CIRP) where the CIIRP does not yield resolution within prescribed timelines or in certain other specified circumstances.

The Insolvency and Bankruptcy Board of India (IBBI) has come out with a discussion paper on creditor-initiated insolvency resolution process (CIIRP), a new out-of-court mechanism introduced in the recently-passed IBC Amendment Act 2026. The document provides an orderly and efficient procedure for creditors to initiate their own claims against insolvent companies. It also sets out rules for various stakeholders who will be involved in the CIIRP.

The paper has introduced a significant number of new components to conduct the CIIRP, including the mandate to obtain approval of 51% creditors (by value) to initiate the process. The paper also provides a timeline of 150 days – that can be extended for another 45 days with the approval of 66% creditors – for the adjudicating authority to approve the resolution plan. This is shorter than the statutory limit of 330 days provided to approve a resolution plan under the conventional insolvency framework.

Importantly, the management of the company remains with the present promoters, but with oversight such as obtaining prior approval of the committee of creditors (CoC) for carrying out transactions above a certain threshold.

A panel set up by the insolvency regulator has suggested that the bankruptcy proceeding be restricted to only stressed projects of a real estate developer instead of the current practice of extending it to the entire realty company.

To strengthen the insolvency framework for medium, small and micro enterprises (MSMEs), a latest Insolvency and Bankruptcy Board of India (IBBI) study suggests that the government should permit clubbing of the claims by operational creditors (OCs) up to a limit of 10 claims. This proposal is aimed at improving the recovery of marginal suppliers/vendors during the insolvency process.

“Individually, many MSMEs do not hold claims large enough to justify the cost of initiating proceedings, even when non-payment is persistent and economically damaging. Aggregation would allow similarly placed OCs to collectively initiate proceedings, thereby improving access to the Insolvency and Bankruptcy Code (IBC) without lowering thresholds across the board,” the study said.

At present, the statutory threshold to submit claims and initiate bankruptcy proceedings for OCs requires a minimum default of Rs 1 crore.

To revive the global investor confidence in India’s insolvency framework, the Insolvency and Bankruptcy Board of India (IBBI) has notified that the International Valuation Standards (IVS) will be applicable for all the valuations conducted under the insolvency and bankruptcy code (IBC). The IBBI’s circular said that these standards will come into force from April 1, and will apply to corporate insolvency resolution process (CIRP), liquidation, and personal guarantor bankruptcy proceedings.

The board said that one of the objectives of the IBC is to maximise the value of assets of an insolvent entity by facilitating a time-bound resolution process. A “fair” valuation serves as a critical input to evaluate resolution plans and facilitate informed decision-making by stakeholders such as potential bidders, committee of creditors (CoC), and authorities like National Company Law Tribunal (NCLT).

The Lok Sabha on Monday approved a clutch of amendments to the Insolvency and Bankruptcy code (IBC) that will significantly reduce resolution timelines, and pave the way for structural reforms in the decade-old law.

The IBC (Amendments) Bill proposes new frameworks to handle complex cases, aligning with evolving global practices. A significant addition is the creditor-initiated insolvency process (CIIRP), an out-of-court mechanism that allows creditors to initiate insolvency for genuine business failures with 51% consent. Post-initiation, the process has to be completed within 150 days with a possible extension of 45 days.

New mechanisms for ‘Group Insolvency’
The Bill also introduces new mechanisms for “group insolvency” and “cross-border insolvency” in a moves aimed at promoting investor confidence. Regarding group insolvency, the Bill has proposed a mechanism for coordinating the insolvency proceedings of multiple related companies within a large corporate group.

Finance and corporate affairs minister Nirmala Sitharaman has moved a bill in the Lok Sabha to amend the Insolvency and Bankruptcy Code (IBC).

ET looks at how the proposed amendments to the decade-old law, blamed by critics for causing inordinate delay in the rescue or liquidation of bankrupt firms, is going to shape the country’s insolvency ecosystem.

The Union Cabinet on Tuesday approved changes in the Insolvency and Bankruptcy Code (IBC), 2015 that will significantly reduce the resolution timelines, and pave the way for structural reforms in the decade-old law. An official told FE that the cabinet approved all 11 observations and suggestions proposed by the select committee on the IBC (Amendment) Bill.

The revised Bill will likely be presented in Parliament in the ongoing session.

IBC Bill proposes faster creditor-led insolvency route
Among the major changes in the IBC law, the Bill allows creditors to initiate insolvency for genuine business failures under creditor-initiated insolvency resolution process (CIIRP). This out-of-the-court mechanism will need support of financial creditors with 51% approval to trigger insolvency. Post initiation, the process has to be concluded within 150 days with a possible extension of 45 days.

The finance ministry has advised banks to take a collaborative approach in the resolution of pending Insolvency and Bankruptcy Cases (IBC) for asset value maximisation, improving recoveries, and ensuring time-bound objectives.

Financial services secretary M. Nagaraju on Monday took a review meeting to monitor the progress in top IBC cases pending for admission and resolution at the National Company Law Tribunal (NCLT). "It was informed that twenty high-value accounts have been resolved through admission, assignment or disposal at NCLT with the coordinated efforts of all stakeholders," the ministry noted in a statement, adding that a detailed review of the top twenty accounts pending for admission and ten accounts pending for resolution was undertaken for early expedition.

The finance ministry further stated that banks were urged to increase their efforts in minimising the number of adjournments and delays in filing CIRP applications. The chief executives of all PSBs were advised to keep monitoring the top cases pending for admission and resolution, it said, adding that issues related to pending IBC cases were also addressed.

In a bid to streamline the insolvency framework for personal guarantors, the Insolvency and Bankruptcy Board of India (IBBI) has come out with a set of forms that makes it mandatory for resolution professionals (RPs) to file information with the board at different stages of an insolvency process involving personal guarantors.

These forms are aimed at strengthening the IBBI’s monitoring system and to inform key stakeholders about the various transactions carried out during the ongoing process.

“These forms are crucial under the insolvency and bankruptcy code (IBC) as they facilitate systematic and transparent record-keeping and seamless reporting. Their key benefits include allowing RPs to easily access and submit forms online, reducing delays, improving efficiency and minimising the likelihood of errors and omissions, ensuring more accurate and reliable information,” the circular said.

The Supreme Court on Tuesday said that attachment of assets under the Benami Act, 1988 can only be challenged within the Benami Act’s statutory framework, and not before the National Company Law Tribunal (NCLT) or National Company Law Appellate Tribunal (NCLAT) by invoking provisions under the Insolvency and Bankruptcy Code (IBC).

A bench of Justice PS Narasimha and Justice Atul Chandurkar quashed the appeal against the NCLAT ruling that upheld the attachment of properties – under the Benami Act – of a company undergoing insolvency proceedings.

SC supports NCLAT stance
The apex court supported the NCLAT stance which had previously said that the Benami Act is a self-contained code with its own authorities and appeal route, so parties must go there rather than use IBC jurisdiction as a shortcut.

The amount realised by the creditors under the Insolvency and Bankruptcy Code (IBC) as a fraction of their total claims has hit a 15-quarter low of 20.02% in October-December 2025. As per the latest report from Insolvency and Bankruptcy Board of India (IBBI), the claimants recovered just over 20% (or Rs 5,477.4 crore) of the total claims admitted (Rs 27,360.9 crore) by them in cases where the insolvent entities were resolved.

Lower realisation indicates an increase in the value of haircuts by the financial and operational creditors.

What do analysts say?
Analysts said that realisations are likely to stay weak, despite higher resolution counts. “We expect realisation levels to remain subdued unless the structural weaknesses within the insolvency ecosystem are addressed.

The Insolvency and Bankruptcy Board of India (IBBI) has proposed a series of changes in the insolvency rules that will plug gaps in insolvency costs and the treatment of delayed claims in addition to bringing in more transparency in the approval of resolution plans by the committee of creditors (CoC). Through a discussion paper, the insolvency board said that even though the commercial wisdom of the CoC remains supreme in the approval of resolution plans, however, certain factors – such as expected recovery vis-à-vis liquidation value, fair market value, credibility and track record of resolution applicants – must be formally in CoC’s meeting while evaluating resolution plans. The enhanced documentation is expected to make the CoC’s decision-making more transparent, and provide evidentiary support in the event of judicial scrutiny.

The government is mulling amendments in the insolvency and bankruptcy code (IBC) to permit litigation funding or third-party funding in insolvency disputes that will significantly help in bringing down the money stuck in preferential, undervalued, fraudulent, and extortionate (PUFE) transactions, an official told FE. “The discussion is still at an early stage as we evaluate the international practices. The changes in IBC will enable specialised agencies to take over filing and pursuing cases involving PUFE transactions. Given the magnitude of funds stuck in the PUFE transactions, the government felt the need to make necessary changes,” the official said. Unlocking Avoidance It’s estimated that over Rs 3.8 lakh crore of funds are locked in avoidance transactions, highlighting the significant, untapped potential to attract third-party agencies in the space. Even though the IBC timlines are often breached, the legal mandate is resolve the case within 180-day period, extendable by another 90 days. This timeline is considered short to recover the assets stuck in PUFE transactions, especially since several of these transactions involve

The Insolvency and Bankruptcy Code (IBC) is not a recovery tool, it’s supposed to turn unproductive companies into productive assets, said Ravi Mital, chairperson of Insolvency and Bankruptcy Board of India (IBBI) on Wednesday. “There’s a considerable improvement in sales, liquidity, market cap, and employee expenses of companies that were resolved under the IBC. If these companies are showing 50% increase in employee expenses, I think the insolvency system has succeeded,” he said. Mital also said that as against the popular belief that just about 30-32% of the claims admitted by the creditors have been realised under IBC, the actual recovery is 94%. “When a company goes into insolvency, we do its enterprise valuation.

The Insolvency Bankruptcy Board of India has launched a set of revised electronic forms for the liquidation process to reduce the compliance burden on insolvency professionals and improve the quality of regulatory filings. The move came after the Insolvency Bankruptcy Board of India (IBBI) had notified amendments on January 2 to the IBBI (Liquidation Process) Regulations, 2016, which mandate that insolvency professionals file the forms, along with enclosures, on the regulator's electronic platform within prescribed timelines. In a circular issued on Monday, IBBI said the existing liquidation forms were comprehensively revised to eliminate duplication, rationalising data requirements and leveraging technology for auto-population of information already available on the portal. The regulator added that these revisions are expected to significantly reduce the time and effort required for compliance while continuing to ensure that the Board receives all essential information in a timely manner.

Creditors have realised Rs 4 lakh crore under the resolution plans initiated under the Insolvency and Bankruptcy Code till September 30, 2025, according to a Reserve Bank report on Wednesday. Since the provisions relating to the corporate insolvency resolution process came into force in December 2016, a total of 8,659 CIRPs have been initiated till September 30, 2025, of which 6,761, or 78.1 per cent, have been closed. The primary objective of the Insolvency and Bankruptcy Code is rescuing corporate debtors (CDs) in distress.

The Insolvency & Bankruptcy Code (IBC) remained the most dominant mode of recovery of stressed assets for banks followed by SARFAESI Act in FY25. This was even as the overall recovery rate improved only marginally from 17.2% to 18% between FY24 and FY25. Recoveries under Debt Recovery Tribunals slipped. Recovery rate The recovery rate under the IBC rose to 36.5% in FY25 as compared with 28.3% the year before, data from RBI’s Report on Trend and Progress of Banking in India showed.

The government’s proposed bill to overhaul the insolvency and bankruptcy code (IBC) has largely ignored the stress in the real estate sector, said a report by ICRA. The agency said that the real estate sector-specific reforms have not been addressed in the current proposals despite real estate and construction sector accounting for the second highest share in cases ongoing insolvency cases. “ICRA believes that structural reforms would be needed for the real estate sector as protecting homebuyers and resolution of stuck housing projects has been a focus area for the government,” it said. Ratings agency on proposed amendments Overall, the ratings agency said that the proposed amendments to IBC will reduce recovery timelines and improve recovery rates for lenders.

The committee of creditors (CoC) cannot modify or alter a resolution plan for reallocation of funds of dissenting creditors, after it is approved, insolvency appellate tribunal NCLAT has said. Dismissing an appeal by Bank of Baroda in the Reliance Communications Infrastructure (RCIL) matter, NCLAT said the assenting members of the CoC cannot alter the financial layout once the bids have been approved. "It is true that the CoC with commercial wisdom can take a decision regarding different aspects of the plan, including manner of distribution, but once the commercial wisdom has been exercised by approving the resolution plan in meeting, the modification of the said distribution mechanism, which is impermissible, cannot be saved in the name of commercial wisdom of the CoC," said NCLAT.