What the new IBC amendment means for company promoters, guarantors
India recently introduced a new amendment bill to the Insolvency and Bankruptcy Code, 2025, hoping to crack down on company promoters and personal guarantors moving their assets around right before declaring insolvency.
Finance Minister Nirmala Sitharaman introduced the bill in Lok Sabha last month.
The main goal? To protect creditors and make sure promoters can't dodge their financial responsibilities by shifting money or property at the last minute.
Bill introduces Section 164A
The bill introduces Section 164A, letting professionals recover suspicious transfers—like when someone moves funds to family or trusts at super low prices—through the National Company Law Tribunal (NCLT).
Experts think this will help level the playing field for creditors and discourage sneaky moves.
The update also covers more complex cases like group or cross-border insolvencies, aiming for fairer outcomes as courts interpret these new rules.