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Posted 05 Feb 2024

Updated 17 Mar 2024

2 min read

  • IBBI notified amendments to the Insolvency Resolution Process (IRP) and Bankruptcy Process (BP) for Personal Guarantors (PGs) to Corporate Debtors (CDs).

 

  • Key highlights of the amendments
    • Allows appointment of same Insolvency Professional (IP) in corporate process as well as insolvency and bankruptcy proceeding of the PGs to CDs.
      • IP is an individual registered with IBBI who act as intermediary in insolvency and bankruptcy processes.
    • Makes convening of meeting of creditors mandatory.

 

  • IBBI also issued Clarifications on Regulatory Framework for IPs and Insolvency Professional Entities (IPEs), which includes:
    • Limit on number of assignments for IPs does not apply to an IP which is an IPE.
      • IPEs can be a company, limited liability partnership, registered partnership firm, which are allowed to carry on activities of an IP.
    • Fee structure for IPEs acting as IPs should be market-determined.

 

  • Significance
    • Efficient functioning of IPEs by removing ambiguities in its roles and responsibilities.
    • Better harmonization and effective coordination between insolvency and bankruptcy processes.
    • Reinforcing a robust and equitable framework for addressing financial distress in PG cases.

 

Insolvency and Bankruptcy Board of India

  • Statutory body under the Insolvency and Bankruptcy Code, 2016.
  • Regulates both Insolvency profession as well as processes.
  • Regulatory oversight over IPs, Insolvency Professional Agencies, IPEs and Information Utilities.
  • Composition: Chairperson, 3 ex-officio members of Central Government, 1 ex-officio member of RBI, and 5 other members (at least 3 full-time) nominated by centre.
  • Tags :
  • Insolvency and Bankruptcy Board of India
  • Insolvency Resolution Process (IRP)
  • Insolvency Professional
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