INSOLVENCY AND BANKRUPTCY BOARD OF INDIA

DISCUSSION PAPER ON

(CREDITOR-INITIATED INSOLVENCY RESOLUTION PROCESS) REGULATIONS, 2026

I. Background

The Insolvency and Bankruptcy Code (Amendment) Act, 2026 introduces a new Chapter IV-A in Part II of the Insolvency and Bankruptcy Code, 2016 (Code), providing a statutory framework for the Creditor-Initiated Insolvency Resolution Process (CIIRP). The CIIRP is aimed at enabling faster and more cost-effective restructuring with minimal business disruption.

The statutory framework under sections 58A to 58K of the Amendment Bill confers upon the Insolvency and Bankruptcy Board of India (IBBI or Board) wide regulation-making powers to operationalise the CIIRP framework. The Committee on Regulations has accordingly drafted the Insolvency and Bankruptcy Board of India (Creditor-Initiated Insolvency Resolution Process) Regulations, 2026 (CIIRP Regulations) to give effect to the legislative intent and provide a detailed procedural architecture for the process.

It is important to note that the statutory framework under sections 58A and 58B of the Amendment Bill envisages that the Central Government shall, by notification, specify: (i) the class or categories of corporate debtors eligible for CIIRP; (ii) the class of financial institutions authorised to initiate the process; and (iii) applicable thresholds and conditions.

The CIIRP framework is premised on four core objectives: (i) enabling creditor-led early intervention after default; (ii) preserving management control of the corporate debtor subject to appropriate oversight; (iii) providing a structured, time-bound pathway to a commercially viable resolution plan; and (iv) facilitating seamless conversion to the Corporate Insolvency Resolution Process (CIRP) where the CIIRP does not yield resolution within prescribed timelines or in certain other specified circumstances.

Public comments: The Board accordingly solicits comments on the draft regulations proposed below. After considering the comments, the Board proposes to make regulations under section 196 read with section 240 of the Code. The process for submission of comments is provided at Page 34.

The last date for submission of comments is 28th April, 2026.

II. Proposed Amendments

The following framework is submitted for consideration:

Creditor-initiated insolvency resolution process: draft rules set approval thresholds, moratorium steps, and resolution plan procedures. Introduces a proposed regulatory framework for the Creditor-Initiated Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016, intended to facilitate faster, lower-cost restructuring with limited business disruption. The draft regulations set out the procedural architecture for initiation, commencement, conduct and closure-related matters, while relying on class notifications by the Central Government for eligible corporate debtors, initiating financial institutions and applicable thresholds and conditions. The initiation framework requires the applicant financial creditor to identify eligible financial creditors from information utility records or other available sources, convene a meeting, and obtain approval of at least fifty-one per cent in value of the debt owed to such creditors. The corporate debtor must be served notice of the intended initiation and may submit a written representation within thirty days; if the applicant continues, a further approval threshold applies.