Insolvency Law / IBC : Major Changes to Impact the Proceedings under IBC, 2016

Insolvency Law / IBC : Major Changes to Impact the Proceedings under IBC, 2016

Recently, Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 2025 has been introduced to amend Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016.

Now, after this an insolvency professional who is not an insolvency professional entity, shall not at any point of time, have more than ten assignments in aggregate as interim resolution professional and resolution professional in a corporate insolvency resolution process and as a liquidator in a liquidation process, of which not more than three assignments shall have admitted claims exceeding one thousand crore rupees each: Provided that an insolvency professional who is not an insolvency professional entity, already holding more such assignments than the limit specified in this regulation on the date of commencement of Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 2025, shall not accept any such new assignment until the number of his ongoing assignments falls below the limit specified in this regulation.

It may be noted that few months ago in August 2025, Govt has introduced a Bill [Bill No. 107/2025] to amend the IBC, 2016. In said Amendment Bill, 2025 Section 28A was sought to be added. This section deals with possession of an asset of personal guarantor or corporate debtor ; S.28A requires permission of CoC. The Bill, 2025 notes that aAmong other measures, the proposed legislation introduces a “creditor initiated insolvency resolution process” with an out-of-court initiation mechanism for genuine business failures to facilitate faster and more cost-effective insolvency resolution, with minimal business disruption. Once implemented, this will help ease the burden on judicial systems, promote ease of doing business and improve access to credit. The proposed legislation also introduces provisions for “group insolvency” and “cross-border insolvency”.

Through this Amendment Bill, 2025 [yet to be passed], Section 64A is also sought to be added to IBC, 2016 which deals with frivolous proceedings before NCLT and S.64A will provide penalty upto Rs. 1 lacs.