A single, time-bound law for resolving corporate and individual insolvency.
Before 2016, insolvency in India was governed by a patchwork of laws — the Sick Industrial Companies Act (SICA), the Recovery of Debts Due to Banks and Financial Institutions Act (Debt Recovery Tribunals), and the SARFAESI Act, 2002 — leading to slow, fragmented recovery processes and rising bad loans.
The Insolvency and Bankruptcy Code, 2016 created a single, time-bound process: once a default is established, a Corporate Insolvency Resolution Process (CIRP) begins, to be completed within 180 days (extendable by 90 days, with an overall cap). An Insolvency Resolution Professional takes over management, and a Committee of Creditors decides on a resolution plan (or liquidation if none is approved).
The Insolvency and Bankruptcy Board of India (IBBI) regulates insolvency professionals and processes. The National Company Law Tribunal (NCLT) adjudicates corporate insolvency cases, with the National Company Law Appellate Tribunal (NCLAT) hearing appeals.
Download this topic's notes as a PDF, or search uploaded materials.
