The insolvency and bankruptcy code, 2016 is the bankruptcy law of India which seeks to consolidates the existing framework by creating a single law for insolvency and bankruptcy.
Insolvency and bankruptcy in India had become one of the biggest challenges for the Indian economy. Recognizing that reforms in the insolvency and bankruptcy regime are critical for improving the business environment and alleviating distressed credit markets, the Government of India introduced the Insolvency and Bankruptcy Code Bill in November 2015, drafted by a specially constituted ‘Bankruptcy Law Reforms Committee’ (BLRC) under the Ministry of Finance. After a public consultation process and recommendations from a joint committee of Parliament, both houses of Parliament passed the Insolvency and Bankruptcy Code, 2016 (“Code/IBC”).
The revised insolvency and bankruptcy law offers a uniform, comprehensive insolvency legislation encompassing all companies, partnerships and individuals (other than financial firms). The Government of India is proposing a separate framework for bankruptcy resolution in failing banks and financial sector entities.