Amended IBC Act notified; Key changes include creditor-led resolution mechanism

New Delhi, May 28: The Central Government has notified the amended Insolvency and Bankruptcy Code (IBC) Act, which contains several crucial changes, including provision for creditor-led resolution mechanisms.

It also marks an overhaul of the liquidation process, stricter timelines and measures aimed at reducing delays in insolvency proceedings.

Notifying of the Insolvency and Bankruptcy Code (Amendment) Act, 2026 by the Ministry of Corporate Affairs (MCA) marks the formal rollout of the 2.0 version of the IBC law, which was enacted in 2017.

Parliament passed the legislation during the last Budget Session, incorporating all the 11 recommendations of the Select Committee along with an additional government amendment mandating the Committee of Creditors (CoC) to formally record reasons for selecting the successful resolution applicant.

The new law makes it mandatory for the NCLT to admit or reject insolvency applications within 14 days of establishing default and record reasons in case of delay.

Under the amended Act, there is a requirement for approval of the manner of distribution within 30 days of approval of the resolution plan’s implementation.

Appeals before the NCLAT are to be disposed of within three months, while liquidation proceedings will now be capped at 180 days, extendable by only 90 days.