Six major amendments that shaped insolvency framework in India

The Insolvency and Bankruptcy Code (IBC), since its enactment, has undergone six legislative amendments aimed at strengthening the insolvency framework and enhancing procedural efficiency in line with evolving market dynamics. This information was provided by the Minister of State in the Ministry of Corporate Affairs, Harsh Malhotra, in response to an Unstarred Question in the Lok Sabha raised by Dr. Mallu Ravi on 28 July 2025.

The key amendments to the Code are as follows:

• First Amendment (2017): This introduced Section 29A to prohibit individuals with questionable antecedents from submitting resolution plans or taking over financially distressed companies.
• Second Amendment (2018): This amendment lowered the voting threshold for resolution plan approval to 66% and for routine decisions to 51%. It also allowed for the closure of the Corporate Insolvency Resolution Process (CIRP) with 90% approval from the Committee of Creditors (CoC), streamlined Section 29A, and provided a one-year grace period for Resolution Professionals (RAs).
• Third Amendment (2019): This provided clarifications regarding restructuring through mergers, amalgamations, and demergers. It also addressed voting impasses among creditors and made resolution plans binding on government entities.
• Fourth Amendment (2019): This facilitated the continuation of critical goods and services, introduced Section 32A concerning the cessation of liabilities for offenses committed before CIRP, and protected property under approved resolution plans.
• Fifth Amendment (2020): This introduced Section 10A, suspending CIRP applications for defaults occurring from March 25, 2020, for a period of up to one year due to the COVID-19 pandemic.
• Sixth Amendment (2021): This brought in the Pre-packaged Insolvency Resolution Process for corporate Micro, Small, and Medium Enterprises (MSMEs).

The government has also invited suggestions from the public via a discussion paper released on January 18, 2023, with a view to further strengthening the functioning of the Insolvency and Bankruptcy Code, 2016. A final decision on these suggestions has not yet been taken.

Also See: In nine years, IBC helps resolve over Rs 26 lakh crore of debt, directly or indirectly