Real Estate Bankruptcy Reforms Delayed in IBC Overhaul

The Indian government has decided to delay real estate-focused bankruptcy reforms as part of the Insolvency and Bankruptcy Code (IBC) overhaul.

These reforms, which aim to protect homebuyers and resolve stuck housing projects, will be addressed separately after further consultations.

The current focus is on insolvency law amendments that are already in an advanced stage, including a creditor-led, out-of-court insolvency process and a new framework for group and cross-border bankruptcies.

The government is prioritizing these measures to be introduced in Parliament during the Winter or Budget Session.

Real estate reforms, which include project-specific insolvency and safeguards for homebuyers, will undergo more deliberations before being taken up later.

Experts believe that the IBC has significantly strengthened the distressed-asset ecosystem, making it more investor-friendly with clearer timelines and recovery pathways.