lipped from: https://taxguru.in/corporate-law/ibc-amendment-bill-2025-means-insolvency-professionals.html
The next chapter of India’s insolvency regime is about to begin — and Insolvency Professionals (IPs) will be at the centre of it. The Insolvency and Bankruptcy Code (IBC) Amendment Bill 2025 is one of the most significant reform packages since the Code was introduced. With proposals on timelines, group insolvency, cross-border cases, enhanced accountability, pre-package processes, and clarity on creditor priorities, the Bill directly affects how Resolution Professionals (RPs) and Liquidators will conduct CIRPs across sectors — especially in real estate, infrastructure, EPC and NBFCs. While the Bill is still awaiting parliamentary approval, it has already set expectations across the insolvency ecosystem. Here’s what IPs need to understand.
1. Admission Within 14 Days — No More Endless Delays at the Start
One of the biggest challenges for IPs has been long delays in admission of CIRP applications. Cases often remain pending for months despite clear defaults.
The Bill mandates that the Adjudicating Authority (NCLT) must admit or reject an application within 14 days if default is established.
What this means for IPs
- CIRP commencement will be quicker.
- Asset value deterioration due to delay will reduce.
- IPs will be able to take over the corporate debtor (CD) sooner.
- Real estate and EPC projects halted during the waiting period may move faster.
This is a substantial structural improvement.
2. Group Insolvency Framework — A Game Changer
For the first time, the Bill empowers the government to notify a Group Insolvency Framework.
This is crucial for:
- Real estate developers with multiple SPVs
- Corporate groups with interlinked assets, guarantees and operations
- Infrastructure conglomerates
- NBFCs with layered subsidiaries
What this means for IPs
- Possibility of handling multiple CIRPs under a coordinated structure.
- More complex but more coherent asset resolution.
- Opportunity for consolidated valuation, combined sale, or coordinated revival.
It’s a major reform and will demand higher technical skill from IPs.
3. Cross-Border Insolvency — Finally Becoming Reality
The Bill provides powers to adopt a framework based on the UNCITRAL Model Law, enabling coordinated insolvency with foreign jurisdictions.
What this means for IPs
- Cases involving foreign lenders, foreign assets, offshore subsidiaries or global investors will now be structurally manageable.
- IPs will need deeper understanding of cross-border finance, global enforcement rights, and foreign law interaction.
- A major capacity-building opportunity for the profession.
4. Tightening Definitions: “Security Interest” and Priority Clarity
Recent litigation created confusion on whether statutory dues could be treated as “secured” by operation of law.
The Bill clarifies that a security interest exists only when agreed by parties, not automatically through statute.
What this means for IPs
- Better clarity in waterfall distribution.
- Reduced litigation from authorities claiming secured status.
- More predictable outcomes for CoC and plan applicants.
5. New Pre-Initiation and Out-of-Court Process (CIIRP)
The Bill proposes an early, creditor-led Creditor Initiated Insolvency Resolution Process (CIIRP) where creditors may reach a structured arrangement outside the NCLT before formal CIRP admission.
What this means for IPs
- More assignments involving pre-CIRP negotiations, evaluation, verification and due-diligence.
- IPs may be appointed earlier in the distress cycle.
- Faster resolutions for SMEs, EPC contractors and real estate projects.
6. Faster Plan Approval, Distribution and Implementation Oversight
The Bill mandates:
- Strict timeframes for plan approval.
- Faster communication of orders.
- Firm timelines for distribution of proceeds.
- More accountability on implementation through monitoring mechanisms.
What this means for IPs
- Implementation delays may reduce.
- Monitoring Committees will become more structured.
- Clearer roles, responsibilities and reporting obligations.
7. Greater Accountability and Oversight of IPs
With increased reliance on IPs, the Bill also strengthens oversight through:
- Expanded powers for IBBI inspections
- Greater emphasis on record-keeping, disclosures and conflict-management
- Defined responsibilities on asset protection, data handling and stakeholder communication
What this means for IPs
- Higher compliance standards
- Greater scrutiny — but also increased professional credibility
- Need for stronger internal systems, SOPs and documentation
Conclusion: A More Demanding but More Empowering Era for IPs
The IBC Amendment Bill 2025 marks a shift toward speed, structure, transparency and global alignment.
For Insolvency Professionals, this means:
- Faster admissions
- More complex and larger assignments
- Wider jurisdiction (group and cross-border)
- Higher expectations from stakeholders
- Greater accountability
- Stronger professional opportunities
This is not just a legislative amendment — it is the beginning of the next stage of evolution for the insolvency profession in India.
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Author Note: The author is an Insolvency Resolution Professional with extensive experience in managing multiple CIRP and liquidation assignments. For queries or professional discussions related to the Insolvency and Bankruptcy Code (IBC), you may reach out to: Krit Narayan Mishra at kritmassociates@gmail.com | +91 99108 59116.
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