Under the current framework (in force since 2020) financial claims over Rs 1 crore can be admitted for resolution before NCLT.
“I feel the threshold needs to be revised upwards – perhaps to Rs 5 crore, if not Rs 10 crore,” Grewal said, adding many matters coming before NCLT are “not really aimed at resolving insolvency.”
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“The applicants want to recover their dues. We have numerous cases involving amounts just above the threshold, ranging from ₹1 crore to ₹2 crore. I believe this needs to be reconsidered,” Grewal said.
Chief Guest Harsh Malhotra also underscored for reforms in IBC, “as is the case with other processes.”
According to Prasad, too many proceedings still exceed timelines prescribed under IBC. “An honest review must also admit what has not gone as intended,” he said Thursday, adding realisations in some cases also require closer scrutiny.“They will be at the top of our agenda in the coming years,” the IBBI chairperson said.
Prasad joined as Whole Time Member, IBBI on July 5, 2022 and is also holding the additional charge of Chairperson at the institution from September 13 this year.
The reform agenda includes creditor-initiated resolution and project-wise treatment of distressed real-estate projects. It also covers group and cross-border insolvency frameworks.
“A living law needs a regulator that keeps pace with it,” Prasad said, noting the regulator’s answer has been to “watch closely, consult widely and act quickly.”
He also sought stronger safeguards against misuse of the Code. Insolvency professionals must conduct due diligence and flag cases serving purposes beyond genuine debt resolution. They often see the complete picture first, Prasad said, adding the regulator expects them to become the “first line of defence” against misuse.
Prasad also stressed identifying the actual buyers of distressed companies. Resolution applicants must disclose beneficial ownership, preventing ineligible promoters from returning through proxies.
“A promoter who lost control through the Code cannot quietly walk back into the company,” he said while detailing key proocesses that need to be followed.
Proposed personal-guarantor reforms include restricting voting by related parties and co-guarantors. They would also extend avoidance-transaction safeguards to individual insolvency proceedings.
According to official estimates, Since its enactment in 2016, the Code has delivered more than Rs 4.35 lakh crore through resolution plans. Creditors recovered around 94% of fair value and 166% of liquidation value, Prasad said. The framework had rescued about 4,227 corporate debtors by June 2026. These included resolutions, withdrawals, and closures following appeals, reviews or settlements.