Insolvency and Bankruptcy Board of India (IBBI) rationalizes Regulatory framework for Insolvency Professional entities | Current Affairs | Vision IAS
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    Insolvency and Bankruptcy Board of India (IBBI) rationalizes Regulatory framework for Insolvency Professional entities

    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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