Overview
- The bankruptcy regulator invited public comments through April 28 on draft rules to run a new creditor-initiated process created by the April 2026 law.
- Financial creditors holding at least 51% of eligible debt could trigger the process against a defaulting company, and the existing management would continue under creditor oversight.
- Timelines are tight: lenders must seek bids within 50 days, cleared plans go to the tribunal within 120 days, and the case should finish in 150 days with a possible 45-day extension.
- Creditors would file a short report rather than a full case, and the National Company Law Tribunal, India’s company law court, would mainly impose a moratorium, hear objections, and approve the plan.
- Governance steps include creditor-set thresholds for large deals and bans on wilful defaulters and undischarged insolvents as bidders, and IBBI also issued related drafts on voluntary liquidation, pre-packaged insolvency, and personal guarantors.