The Ministry of Corporate Affairs (MCA) has notified 26 May 2026 as the date on which several provisions of the Insolvency and Bankruptcy Code (Amendment) Act, 2026 will come into force.
According to the notification, the provisions coming into effect include Sections 2 to 6, Sections 8 to 33, Section 34(a)(iii) and Section 34(b), Sections 35 to 39, Section 41, Sections 43 to 44, Section 46, Sections 48 to 59, Sections 61 to 66, Section 68, Section 69(a), Section 70(a), specified sub-clauses under Section 70(b), and Section 72 of the Amendment Act. Certain provisions, however, remain excluded from immediate enforcement, including sub-clause (xx) under Section 70(b).
Table of Contents
Sections 2–6: Changes in Definitions and Insolvency Initiation Framework
Sections 2 to 6 of the Amendment Act introduce significant definitional and procedural changes within the Insolvency and Bankruptcy Code. A new definition of “registered valuer” has been introduced with reference to the Companies Act framework. The amendment also introduces the broader category of “service provider”, which includes insolvency professionals, insolvency professional agencies, information utilities, registered valuers and other notified entities involved in insolvency proceedings. A major clarification has also been inserted regarding security interest, stating that such rights will exist only when created through an agreement or arrangement between parties and not merely by operation of law.
The amendment further introduces concepts such as “avoidance transaction” and “fraudulent or wrongful trading.” It also clarifies that where multiple insolvency applications are pending, the initiation date will be linked to the first application filed. Further, the timelines applicable for admission or rejection of insolvency applications have been strengthened by requiring the Adjudicating Authority to pass orders within fourteen days and record reasons for delay where such timeline is not adhered to.
Section 8 to Section 17: Withdrawal of Applications and Strengthening of CIRP Process
Sections 8 to 17 bring extensive modifications to the Corporate Insolvency Resolution Process (CIRP). A substituted Section 12A creates a more structured mechanism for withdrawal of admitted insolvency applications. Withdrawal is now prohibited before constitution of the Committee of Creditors (CoC) and after invitation for submission of resolution plans. The Adjudicating Authority must decide such applications within thirty days.
The amendment also expands the role and responsibilities of Interim Resolution Professionals and Resolution Professionals. The Interim Resolution Professional has been given authority to verify and determine claim values. The requirement of assistance has also been widened from only “personnel” to all relevant “persons” associated with the corporate debtor, promoters and management. Further, the Resolution Professional has been expressly obligated to initiate proceedings concerning avoidance transactions and fraudulent or wrongful trading where necessary.
A new Section 28A also introduces provisions allowing transfer of assets belonging to guarantors during insolvency proceedings subject to creditor approval and specified safeguards.
Sections 18–19: Reforms in Resolution Plans and Treatment of Claims
Sections 18 and 19 introduce substantial changes relating to resolution plans. The amendment strengthens the position of dissenting financial creditors by ensuring a minimum payment mechanism. It also requires the Committee of Creditors to record reasons for approval of a plan and creates a framework for implementation and supervision of approved plans.
The amendment further protects licences, permits, registrations and similar governmental grants attached to approved resolution plans. It also provides that claims existing before approval of a resolution plan against the corporate debtor stand extinguished and no further proceedings can continue on the basis of such claims after plan approval.
Section 20: Restoration of CIRP and Liquidation Process Reforms
Section 20 introduces a significant change by allowing restoration of the Corporate Insolvency Resolution Process in situations where grounds for liquidation have arisen. The Adjudicating Authority may restore CIRP upon application of the Committee of Creditors and permit completion within an additional period of up to 120 days. However, such restoration is permitted only once. A mandatory thirty-day period has also been prescribed for passing liquidation orders.
Section 21 and Section 22: Separation of Roles of Resolution Professional and Liquidator
Section 21 and newly inserted Section 22 bring an important structural reform by separating the roles of Resolution Professional and Liquidator. The Resolution Professional handling the Corporate Insolvency Resolution Process can no longer automatically become the liquidator for the same corporate debtor. Instead, the Insolvency and Bankruptcy Board will recommend another insolvency professional. The Board is required to provide such recommendation within ten days.
Sections 35–39 and Section 41: Restructuring of Liquidation Framework
Sections 35 to 39 and Section 41 substantially restructure the liquidation process. The liquidator is now required to maintain an updated list of creditor claims and the Committee of Creditors has been given supervisory powers during liquidation. Certain provisions dealing with proof and verification of claims have been omitted and integrated into a revised structure for greater efficiency.
Sections 43–44 and Section 46: Changes Relating to Avoidance and Undervalued Transactions
Sections 43 and 44 revise the treatment of preferential transactions by modifying the look-back period calculation. Instead of relying only on insolvency commencement date, the period now begins from the specified period preceding the initiation date and extends up to the insolvency commencement date.
Section 46 similarly modifies the treatment of undervalued transactions and aligns the applicable look-back period with the revised framework.
Sections 48–59: Introduction of Creditor-Initiated Insolvency Resolution Process (CIIRP)
Sections 48 to 59 introduce one of the most significant reforms under the Amendment Act by creating a new Creditor-Initiated Insolvency Resolution Process (CIIRP) framework through insertion of Chapter IV-A. Under this mechanism, specified classes of financial creditors may initiate insolvency proceedings against eligible categories of corporate debtors after obtaining approval from at least fifty-one per cent of specified financial creditors.
The process requires notice to the corporate debtor and an opportunity for representation. Corporate debtors can challenge the commencement before the Adjudicating Authority. The process must ordinarily conclude within 150 days, extendable once by up to forty-five days. Existing management continues to remain in control, although the Resolution Professional receives oversight powers and can seek moratorium protection. The process can also subsequently be converted into a regular CIRP.
Sections 61–66: Strengthening of Fraudulent and Wrongful Trading Framework
Sections 61 to 66 strengthen provisions concerning avoidance transactions, fraudulent trading and wrongful trading. Proceedings relating to such transactions are now insulated from the completion of CIRP or liquidation proceedings and can continue independently even after closure of the main insolvency process.
Sections 68, 69(a), 70(a), Specified Sub-Clauses of Section 70(b), and Section 72: Strengthening of Offence and Penalty Framework
Sections 68, 69(a), 70(a), specified provisions of Section 70(b), and Section 72 strengthen the penal and enforcement structure of the Insolvency and Bankruptcy Code. These amendments enhance provisions dealing with concealment of information, fraudulent conduct, non-cooperation, and misconduct during insolvency proceedings. The objective appears to be strengthening accountability and ensuring stricter compliance with procedural obligations under the Code.
However, sub-clause (xx) under Section 70(b) has not been brought into force and therefore remains excluded from immediate implementation.
Notification Details
Notification No. F. No. Insol-30/8/2025-Insolvency-MCA
Date: 22/05/2026
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