The Insolvency and Bankruptcy Code (Amendment) Act, 2026 (Act) received presidential assent on 6 April 2026, and was published in the Official Gazette as Act No. 6 of 2026. It introduces major reforms, the salient features of which are summarised below:

BASISPOST AMENDMENT
Definition of Security Interest narrowed The definition of “security interest” now clarifies that such an interest must be created pursuant to a consensual agreement or arrangement between parties, expressly excluding any right or claim created merely by operation of law. This change overrides the decision in State Tax Officer v. Rainbow Papers Limited1 and prevents government authorities from elevating their claims to that of secured creditors in the asset distribution waterfall.
Faster Admission of CIRP Applications & Grounds for Rejection Restricted 

1. Corporate Insolvency Resolution Process (CIRP) applications must now be admitted by the NCLT within 14 days if (i) the NCLT is satisfied that a default occurred; and (ii) no proceedings are pending against the resolution professional (RP). Delays beyond 14 days require written reasons.

2. If these conditions are met, no other grounds for rejection shall be considered. This applies to both financial and operational debts.

3. A financial institution’s record of the debtor’s default is sufficient proof of default. 

Withdrawal Post Admission- Threshold Raised 

Withdrawal of an application after admission into CIRP can only be made by the RP with the approval of 90% of voting share of the committee of creditors (CoC).

Previously, the NCLT could permit an application to be withdrawn, prior to the constitution of the CoC. The amendments clarify that an application, once admitted, can only be withdrawn by the RP after constitution of the CoC. This ensures that insolvency proceedings are not misused for debt recovery. 

Resolution Plan Oversight – New Monitoring Committee Introduced 

Each resolution plan shall now constitute a committee consisting of an RP or any other insolvency professional, representatives of a class(es) of creditors and the resolution applicant to oversee the implementation and supervision of the resolution plan. Regulations for a monitoring committee to ensure the proper working of the resolution plan are also proposed.

Previously, the RP had to only confirm that a resolution plan provided for the implementation and supervision of the resolution plan. Although oversight committees were often formed in practice, this was not mandated. The amendments propose to (i) ensure accountability during implementation of a resolution plan; (ii) prevent value erosion and hurdles during implementation and (iii) ensure a structured oversight mechanism. 

Clarification of the Clean Slate Principle 

The amendments clarify that any claim not covered by an approved resolution plan shall stand extinguished and no proceedings shall continue or be instituted against the corporate debtor on the basis of such claims including proceedings for assessment of the claims. This clarification applies from the date of commencement of the Code. 

Liquidation – RP Disqualified 

1. Once the NCLT has passed an order of liquidation, the NCLT shall refer the Insolvency and Bankruptcy Board of India (IBBI) for making a recommendation for a liquidator.

2. An RP cannot be appointed as the liquidator. 

CIIRP- New Creditor Led Pathway and Debtor-in Possession Model Introduced 

1. The Bill introduces an ‘out-of-Court’ Creditor-Initiated CIRP (CIIRP) by which a financial creditor may directly initiate a CIIRP against the corporate debtor by appointing a resolution professional after obtaining approval of 51% of the others financial creditors. The corporate debtor must be intimated of this and its representation must be considered.

2. The management of the corporate debtor’s affairs continues to vest with its board of directors even after initiation of CIIRP, with the RP holding supervisory veto powers.

3. This mechanism is designed to minimize business disruptions while negotiating financial restructuring out-of-court.

4. Only a certain class of financial creditors (to be notified) may initiate a CIIRP.

5. The CIIRP must be publicly announced and communicated to the NCLT and the IBBI. The corporate debtor can file its objection to the initiation of CIIRP with the Tribunal. 

6. The CIIRP shall be completed within 150 days and only 1 extension may be granted so as to ensure speedy resolution. 

Cross-border Insolvency – Enabling Framework Created 

1. The Central Government is empowered to prescribe rules for administering and conducting cross-border insolvency proceedings, including the process for: (i) recognition of proceedings, (ii) granting relief, (iii) judicial cooperation, and (iv) assistance and coordination.

2. The term ‘corporate debtor’ has been expanded to include any person incorporate with limited liability outside India. 

Personal Guarantor Assets – CoC Transfer Enabled 

A creditor holding a security interest over the personal guarantor’s asset and in possession of that asset under any law, may transfer that asset as a part of the corporate debtor’s CIRP, after approval by 3/4th of the CoC.

Group Insolvency – Enabling Framework Created 

The Central Government is empowered to make rules for initiating proceedings for coordination and cooperation of corporate debtors of a group including a common bench for insolvency proceedings, appointment and replacement of RPs, making an agreement to coordinate and synchronise the insolvency proceedings of the corporate debtors that form part of a group.