Rajya Sabha has taken up the Insolvency and Bankruptcy Code (Amendment) Bill, 2025, for consideration and passing. Minister of State for Corporate Affairs Harsh Malhotra moved the Bill, which aims to further amend the Insolvency and Bankruptcy Code 2016. The Bill seeks to address procedural delays and interpretational issues among companies and individuals.
Initiating the discussion, Rajeev Shukla of Congress said that the Insolvency and Bankruptcy Code (IBC) was introduced in 2016 to revive stressed and non-performing companies. He said the objective was to ensure that companies burdened with NPAs could be restructured, operations could resume, and jobs could be protected. He acknowledged that in its initial years, the IBC delivered strong results. India’s global ranking in insolvency resolution improved significantly from 136 to 52, indicating that the reform was effective and the system had strengthened. Mr Shukla, however, said that over time, the framework, which was originally meant to ensure speed, transparency, and value maximisation, is now struggling. He said delays, inefficiencies, and serious concerns regarding fairness and accountability have weakened the system.
Dr Radha Mohan Das Agarwal of the BJP said the gross Non-Performing Assets (NPAs) of Scheduled Commercial Banks stood at approximately 11.18% at the time of the implementation of this Code in 2016. He said after the implementation of this legislation, the gross NPAs declined to 2.05% in September last year. Dr Agarwal said, in the case of Public Sector Banks, gross NPAs were as high as 14.58 %, which dropped to 2% by September last year. He further pointed out that during 2024-25, Scheduled Commercial Banks recorded their highest-ever profit of over four lakh crore rupees, while Public Sector Banks reported profits of one lakh 78 thousand crore rupees. The BJP MP said that before the introduction of the IBC framework, the recovery from stressed assets was limited to only 15 to 20 %. However, after the establishment of insolvency mechanisms, the recovery rate improved significantly to 36.6% in 2024-25.
Sukenedu Sekhar Ray of TMC claimed that the Insolvency and Bankruptcy Code was brought in a hurried manner to make an exit route for defaulting companies to escape liabilities. He said, in the last nine years, six amendments were made in the IBC Act and 122 amendments in its regulations since its inception.
