IBC (Amendment) Act, 2026: What Changed
Most of it is in force from 26 May 2026. None of it is examinable yet. Learn both versions.
The Insolvency and Bankruptcy Code (Amendment) Act, 2026 (Act 6 of 2026) received Presidential assent on 6 April 2026. Its 72 sections reach into every Part of the Code. Most of it came into force on 26 May 2026 under notification S.O. 2625(E) of 22 May 2026; a few parts, including the new creditor-initiated process, group insolvency and cross-border rules, were left out of that notification.
For candidates the key fact is timing. The Limited Insolvency Examination tests the law as on 4 February 2025, so none of these changes is examinable in the series running from 1 July 2025. You need both versions: the old rule for the paper, the new rule for practice.
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CIRP Changes in Force From 26 May 2026
7(5)
Before (exam law)
NCLT "may" admit if default, complete application and no disciplinary proceeding against the proposed RP
After 26 May 2026
NCLT "shall", within 14 days, admit or reject; no other ground to reject (Explanation I); a financial institution's IU record of default is sufficient (Explanation II); reasons recorded if 14 days missed
9(5), 10(4)
Before (exam law)
No reasons proviso
After 26 May 2026
Reasons recorded if not decided in 14 days; in section 10 cases, IBBI recommends the IRP (section 16(3A))
12A
Before (exam law)
Applicant withdraws with 90% CoC approval
After 26 May 2026
RP applies with 90% CoC approval; not before the CoC is constituted, and not after the first invitation for resolution plans; NCLT decides in 30 days
14(3)(b)
Before (exam law)
Moratorium does not apply to a surety
After 26 May 2026
Explanation: the moratorium does apply where the surety acts against the corporate debtor under the guarantee
22(3)(a)
Before (exam law)
CoC's choice of RP communicated to the NCLT
After 26 May 2026
Deemed appointed from the date of the CoC resolution; communicated to IBBI
28A (new)
Before (exam law)
None
After 26 May 2026
A creditor holding a guarantor's asset after enforcing security may transfer it as part of the resolution with prior CoC approval
30(2)(ba)
Before (exam law)
Dissenting financial creditors get at least liquidation value
After 26 May 2026
At least the lower of liquidation value or what the plan amount would give them under the section 53(1) order; CoC records reasons for approving (section 30(4))
31
Before (exam law)
No timeline
After 26 May 2026
Order within 30 days; NCLT may give the CoC notice to fix defects before rejecting; may approve implementation first and distribution later; licences survive; claims against the debtor arising before approval are extinguished unless the plan provides otherwise
33(1A)
Before (exam law)
None
After 26 May 2026
CoC (66%) may apply once to restore the CIRP, for up to 120 days, before a liquidation order
| Section | Before (exam law) | After 26 May 2026 |
|---|---|---|
| 7(5) | NCLT "may" admit if default, complete application and no disciplinary proceeding against the proposed RP | NCLT "shall", within 14 days, admit or reject; no other ground to reject (Explanation I); a financial institution's IU record of default is sufficient (Explanation II); reasons recorded if 14 days missed |
| 9(5), 10(4) | No reasons proviso | Reasons recorded if not decided in 14 days; in section 10 cases, IBBI recommends the IRP (section 16(3A)) |
| 12A | Applicant withdraws with 90% CoC approval | RP applies with 90% CoC approval; not before the CoC is constituted, and not after the first invitation for resolution plans; NCLT decides in 30 days |
| 14(3)(b) | Moratorium does not apply to a surety | Explanation: the moratorium does apply where the surety acts against the corporate debtor under the guarantee |
| 22(3)(a) | CoC's choice of RP communicated to the NCLT | Deemed appointed from the date of the CoC resolution; communicated to IBBI |
| 28A (new) | None | A creditor holding a guarantor's asset after enforcing security may transfer it as part of the resolution with prior CoC approval |
| 30(2)(ba) | Dissenting financial creditors get at least liquidation value | At least the lower of liquidation value or what the plan amount would give them under the section 53(1) order; CoC records reasons for approving (section 30(4)) |
| 31 | No timeline | Order within 30 days; NCLT may give the CoC notice to fix defects before rejecting; may approve implementation first and distribution later; licences survive; claims against the debtor arising before approval are extinguished unless the plan provides otherwise |
| 33(1A) | None | CoC (66%) may apply once to restore the CIRP, for up to 120 days, before a liquidation order |
Other Changes in Force From 26 May 2026
- check_circleLiquidation: the CoC continues and supervises the liquidator (sections 21(11), 35(2)) and can replace the liquidator by 66% (section 34A); the RP cannot become the liquidator (section 34(4)); sections 38-42 on claims in liquidation are omitted.
- check_circleSecured creditors in liquidation: 14 days to tell the liquidator they will realise their security, failing which it is deemed relinquished; where several share a security, realisation needs creditors holding 66% of those secured claims (section 52(2)).
- check_circleFast track insolvency (Chapter IV, sections 55-58) is omitted.
- check_circleVoluntary liquidation must finish within the specified period of not more than one year, and can be terminated by special resolution with two-thirds of creditors by value (section 59).
- check_circleAvoidance transactions: look-back periods are now counted back from the initiation date (the date of the first application) and run up to the insolvency commencement date; creditors, members or partners may apply if the RP or liquidator does not (section 47).
- check_circleNew civil penalties: frivolous proceedings (section 64A), breach of moratorium or of a resolution plan (section 67B), an operational creditor hiding a dispute (section 67C); sections 74 and 76 (offences) are omitted.
- check_circleRegulators: "service provider" now covers IPs, IPAs, IUs and registered valuers (section 3(31A)); operational creditors must file with an IU before a section 9 application (section 215(3)); IBBI's disciplinary orders are appealable to the NCLAT (section 220(7)).
- check_circleSecurity interest: a security interest exists only where created by agreement between two or more parties, not merely by operation of law (Explanation to section 3(31)).
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Enacted but Not Yet in Force
S.O. 2625(E) did not notify: the creditor-initiated insolvency resolution process (new Chapter IV-A, sections 58A onwards, started by a notified class of financial institutions appointing an RP, without a prior NCLT order, after 51% approval), group insolvency (Chapter VA), the electronic portal (section 240B), cross-border insolvency rules (section 240C), the new sources and uses of the Insolvency and Bankruptcy Fund (section 224), and the consequential amendments that refer to the creditor-initiated process (including sections 11, 54A, 65, 67A and 208). Their text is in the Act, but they are not yet law. IBBI's notifications page listed no later commencement notification when this page was checked on 3 October 2026.
How the Limited Insolvency Examination Tests This
It does not, yet. Questions in the current series are set on the law as on 4 February 2025. The real risk is the reverse: candidates who studied from 2026 notes answer with the new rule. On the paper, section 7(5) admission is discretionary in the Vidarbha Industries sense, withdrawal under section 12A is by the applicant, and fast track still exists.
Once IBBI moves the cut-off past 26 May 2026, the 14-day mandate, the narrow section 12A window and the section 30(2)(ba) floor are natural case-study material.
FAQs
When did the IBC Amendment Act 2026 come into force?expand_more
Most provisions on 26 May 2026, under S.O. 2625(E) dated 22 May 2026. The creditor-initiated process, group insolvency, the e-portal and cross-border rules were not included in that notification.
Is the IBC Amendment Act 2026 in the Limited Insolvency Examination syllabus?expand_more
No. The current syllabus tests the law as on 4 February 2025 and states that later amendments are not considered.
Is admission of a section 7 application now mandatory?expand_more
Since 26 May 2026, section 7(5) says the NCLT "shall" admit within 14 days if a default has occurred, the application is complete and no disciplinary proceeding is pending against the proposed RP, and no other ground may be used to reject it. If 14 days pass, the NCLT records reasons for the delay.
What is the creditor-initiated insolvency resolution process?expand_more
A process in the new Chapter IV-A that a notified class of financial institutions could start by appointing an RP after approval from creditors holding 51% of debt owed to that class. It was enacted in 2026 but was not in the 26 May 2026 commencement notification.
Next steps
- CIRP Timelinesarrow_forward
- Initiating CIRParrow_forward
- Syllabusarrow_forward
- NCLT and NCLATarrow_forward
65 questions, case-study format, negative marking.