The Insolvency and Bankruptcy Code (Amendment) Act, 2026 has received the assent of the President of India on 6 April 2026 and has been notified as Act No. 6 of 2026. The amendment, introduced through Bill No. 107 of 2025, was passed by both Houses of Parliament prior to receiving Presidential approval and seeks to amend the Insolvency and Bankruptcy Code, 2016.
The Act shall come into force on such date(s) as may be notified by the Central Government in the Official Gazette, and different provisions may be brought into effect in a phased manner.
The 2026 amendment introduce changes to the initiation, conduct, and scope of insolvency resolution and liquidation processes under the Code. The key amendments are set out below.
1. Creditor-Initiated Insolvency Resolution Process (CIIRP)
The amendment introduces a creditor-led mechanism permitting financial creditors to initiate insolvency without immediate recourse to the Adjudicating Authority. The process may be triggered upon approval of not less than 51% of financial creditors by value, following which a public announcement is issued inviting claims. The framework contemplates constitution of the Committee of Creditors at this preliminary stage itself, with subsequent filing before the Adjudicating Authority for formal recognition of the process. The amendment effectively inserts enabling provisions alongside Sections 7 and 10 to recognise this parallel route of initiation and provides a statutory basis for a pre-admission creditor-controlled process.
2. Timelines and Role of Adjudicating Authority
The amendment strengthens compliance with statutory timelines by introducing an obligation on the Adjudicating Authority to record reasons in writing where an application is not admitted within the prescribed 14-day period under Section 7(4) and Section 9(5). Further, a specific timeline has been introduced requiring the Adjudicating Authority to approve or reject a resolution plan within 30 days of its receipt under Section 31. In relation to liquidation, the amendment prescribes a maximum period of 180 days for completion of the liquidation process, subject to limited extensions. These changes are intended to operationalise the timelines already contemplated under Section 12 and related provisions.
3. Management of the Corporate Debtor
The amendment provides that, in the initial phase of the newly introduced framework, the management of the corporate debtor shall continue to vest in the existing board or promoters, subject to oversight of the Committee of Creditors. This represents a modification to Section 17, which previously mandated suspension of the board upon commencement of CIRP. The continued management is, however, subject to restrictions, including that no related party transactions, asset disposals, or material financial decisions may be undertaken without prior approval of the CoC. The CoC retains the power to displace the management and vest control in a resolution professional upon specified triggers.
4. Flexibility in Resolution Plans
The amendment clarifies the scope of Section 30 by expressly providing that a resolution plan may include sale or transfer of one or more assets, business undertakings, or divisions of the corporate debtor, either on a standalone basis or in combination. This removes any interpretational constraint that the resolution must be for the corporate debtor as a whole. The amendment also enables submission of composite or segmented resolution plans, thereby permitting different applicants to acquire different parts of the business under a single process, subject to approval by the Committee of Creditors.
5. Cross-Border Insolvency
A new framework has been introduced to address cross-border insolvency, incorporating principles of recognition of foreign proceedings and cooperation between jurisdictions. The amendment enables the Central Government to notify provisions based on the UNCITRAL Model Law on Cross-Border Insolvency, and inserts enabling sections dealing with recognition of foreign main and non-main proceedings, access to foreign representatives, and coordination between domestic and foreign courts. This fills the existing gap under Sections 234 and 235, which were limited in scope and rarely invoked.
6. Group Insolvency Framework
The amendment introduces enabling provisions to facilitate group insolvency resolution, allowing coordination of proceedings involving multiple corporate debtors forming part of the same group. It provides for procedural consolidation, joint hearings, and coordinated resolution strategies where entities are interconnected through common control or business operations. While substantive consolidation is not mandated, the framework allows the Adjudicating Authority to pass appropriate directions for efficient conduct of proceedings involving group entities.
7. Amendments Relating to Personal Guarantors
The amendment expands the disclosure obligations of personal guarantors to corporate debtors under the relevant provisions and regulations. It requires comprehensive disclosure of all assets, including movable and immovable property, financial investments, foreign assets, and other valuable holdings such as digital assets and high-value personal property. The intent is to ensure completeness of the insolvency estate and to enable effective recovery. Non-disclosure or misrepresentation is subject to consequences under the Code.
8. Pre-Packaged Insolvency Resolution Process (PPIRP)
The amendment revises the framework governing pre-packaged insolvency resolution processes, particularly for MSMEs. It streamlines the procedure for submission and evaluation of the base resolution plan, clarifies timelines for approval by the Committee of Creditors, and aligns the provisions with the broader amendments to the Code. The role of the resolution professional and the process for competing plans have also been refined to ensure consistency with the CIRP framework.
9. Liquidation Process
Amendments have been introduced to the liquidation framework under Chapter III to ensure time-bound completion within 180 days, subject to limited relaxation. The provisions clarify aspects relating to realisation of assets, conduct of auctions or private sales, and distribution of proceeds under Section 53. The amendment also enables greater flexibility in sale mechanisms, including sale of assets in parcels or as a going concern, depending on value maximisation considerations.
10. Miscellaneous and Enabling Provisions
The amendment confers powers on the Central Government and the Insolvency and Bankruptcy Board of India to frame regulations for implementation of the new framework, including the creditor-initiated process, cross-border insolvency, and group insolvency. It also includes clarificatory amendments to harmonise existing provisions, remove inconsistencies, and align the Code with evolving jurisprudence and practice.
