On March 30, the Lok Sabha passed the bill to change the bankruptcy law. Now, if a company goes bankrupt, the money received by selling its assets will first be used to pay the pending salaries and dues of the workers and employees. Only after this the rest of the people will be paid. Finance Minister Nirmala Sitharaman said that this new system will replace the old fast-track process, as the old system was not working properly. Apart from this, now it will also be easier to resolve disputes related to several companies of the same group and their properties stuck abroad. Sitharaman said – There is no compromise with the rights of workers. Responding to the discussion during the budget session of Parliament, Finance Minister Nirmala Sitharaman assured that the interests of workers will not be ignored during the bankruptcy process. He said that such provisions have been made in the law so that the dues of the workers are kept higher in the list of payment. If default occurs, the application will have to be approved within 14 days. Another major advantage of the amendment bill is that now bankruptcy cases will not be delayed. As soon as a company’s default (inability to repay loan) is proved, it will be mandatory to accept the insolvency application against it within 14 days. This will speed up the entire process and employees will not have to wait for years to get their rights. Banks have recovered Rs 4.11 lakh crore so far. The Finance Minister told the House that the health of the country’s banking sector has improved with the implementation of the IBC law. According to the data till December 2025: Those taking unfair advantage will be fined up to ₹ 5 crore. The Finance Minister has made it clear that the Insolvency Act (IBC) is no longer a means of recovery but a means of solution. If any person or company takes advantage of this entire process or creates hurdles in it, then heavy penalty will be imposed on him: Small companies will be able to settle outside the court. There were some shortcomings in the old system, to overcome which the ‘creditor-in-control’ model is now being introduced. In this, creditors (like banks or other money lenders) will be able to start the resolution process themselves. Also, easier methods like out-of-court settlement will be adopted for small companies, so that long legal battles can be avoided. This law has been changed 7 times. Let us tell you that the government had introduced this amendment bill in the Lok Sabha on 12 August 2025. After this it was sent to the Select Committee. The committee submitted its report in December 2025, on the basis of which it has now been passed. The IBC has been amended a total of 7 times since it was first implemented in 2016.
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If the company defaults, the workers will be the first to get their dues: Bank Corruption Amendment Bill passed, bankruptcy application to be approved in 14 days
