November 5, 2025

Big relief for banks and homebuyers caught in the web of bankrupt companies! The Enforcement Directorate (ED) and the Insolvency and Bankruptcy Board of India (IBBI) have come together to solve a tricky problem. When companies go bankrupt and their assets are frozen by the ED under anti-money laundering laws, those assets couldn’t be used to pay back the people who are owed money. This created a big roadblock in the bankruptcy resolution process. But worry no more! After many talks and teamwork, the IBBI issued a new circular on November 4 officially announcing a fresh Standard Operating Procedure (SOP). This new SOP lets Insolvency Professionals ask the courts to release assets that were stuck in ED’s grip. Once released, these assets can go back to the banks, homebuyers, or other creditors who were cheated or left unpaid. Now, the Insolvency Professionals will file a "standard undertaking" with the special PMLA court. This promise ensures that the assets will be used only to help the creditors and not benefit the accused promoters or offenders. Plus, strict reporting and safeguards will keep the process transparent until the case is fully resolved. The ED explained, "This process now enables Resolution Professionals to seek release of such assets through applications filed under Sections 8(7) and 8(8) of PMLA." They also pointed out, "This initiative demonstrates that strict enforcement under PMLA and value maximisation under IBC are not conflicting objectives. Instead, when coordinated, they ensure prosecution of economic offenders while protecting public and creditor interest through lawful resolution." This teamwork helps speed up resolutions under the Insolvency and Bankruptcy Code (IBC), reduces court delays, and makes sure that crime proceeds do not end up in the hands of wrongdoers. The ED said they are "committed" to ensuring offenders get no benefits while boosting recovery for those owed money. So, this new and smart SOP is truly a game-changer, ensuring justice for honest creditors and a tough fight against economic crimes!

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Tags: Ed Attachment, Bankrupt Companies, Ibbi, Pmla, Asset Restitution, Insolvency professionals,