Debate Over Insolvency & Bankruptcy Code Revisions Sparks Controversy in Rajya Sabha

The Rajya Sabha on Wednesday witnessed intense criticism directed at the government's frequent amendments to the Insolvency & Bankruptcy Code (IBC), highlighting significant haircuts for creditors and alleged favoritism towards larger corporate defaulters.

Debate on the Insolvency and Bankruptcy Code (Amendment) Bill, 2026, has brought to light ongoing infrastructure issues at the National Company Law Tribunal (NCLT) and increasing case backlogs threatening judicial efficiency. Critics argue the amendments have not addressed these major concerns.

Sukhendu Sekhar Ray of AITC criticized the government's handling of the insolvency law, describing it as a means to favor large corporate defaulters. He highlighted the substantial financial losses incurred by banks due to haircuts, asserting the bill facilitates asset stripping over genuine resolutions.