IBBI Regulations on Insolvency Professionals, 2016
Regulating Insolvency Professionals for development of the insolvency eco-system in India
The insolvency and bankruptcy processes provided under the Insolvency and Bankruptcy Code, 2016 (Code) is managed by a specialised class of professionals known as ‘insolvency professionals’ or ‘IPs’. The Code adopts a “regulated self-regulation” model for the development and regulation of the insolvency profession in India. A two-tier regulatory structure is created with the Insolvency and Bankruptcy Board of India (IBBI) as the principal regulator and multiple Insolvency Professional Agencies (IPAs) as the frontline regulators. To render services as an IP, an individual is required to enrol with an IPA and also register with the IBBI.
The IBBI notified the Insolvency and Bankruptcy Board of India (Insolvency Professional) Regulations, 2016 (IP Regulations) in 2016 for development and regulation of the IP industry. Under the IP Regulations, an individual can register as an IP to render services under the Code. To ensure appropriate standards for the profession, the IBBI conducts a Limited Insolvency Examination, which is a prerequisite for registration. Once registered, the IPs are required to abide by the Code of Conduct specified under the First Schedule to the IP Regulations. The IP Regulations also outline the process for disciplinary proceedings involving IPs. They provide for recognition of ‘Insolvency Professional Entities’ as well.
Ever since its notification, the IP Regulations has proved successful in fulfilling its mandate. In a brief span of three years, India has seen tremendous growth in this profession. More than three thousand individuals have registered as IPs with the IBBI over the years and more than one hundred IPEs have been recognised. There has been a growing acceptability of the services rendered by the insolvency professionals in the Indian market, even outside the services rendered under the Code.
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About the Contributors
Debanshu is one of Vidhi’s Co-Founders. He has over a decade of experience in commercial laws and the financial sector and has advised the Government of India on several legislative projects in this space. He was instrumental in advising the Government on the design and drafting of the Insolvency and Bankruptcy Code and its subsequent implementation. He has developed and curated Vidhi’s work on insolvency law, corporate law, financial regulation, and competition law and conceptualized its Bankruptcy Research Program. He has served as a member of a Government-appointed committee for operationalizing the National Company Law Tribunal and deposed before two Parliamentary committees examining financial sector legislation. He has also worked as a teaching fellow at Harvard Law School. He is an alumnus of the Harvard Law School, the University of Oxford, and Hidayatullah National Law University. He attended Harvard as a Fulbright Scholar and was awarded the Irving Oberman Memorial Prize in Bankruptcy and the Dean’s scholar prize in Corporations. He was also awarded a Distinction for his graduate studies at Oxford. In 2017, he was selected for NYU School of Law’s Hauser Global Scholarship, which he waived. His academic work has been published in peer-reviewed journals and an edited book published by Cambridge University Press, New York. He has been consulted by and mentioned in global business publications, such as IFR Asia and The Economist. Earlier, Debanshu practiced as an M&A and regulatory lawyer with AZB & Partners at its Mumbai and New Delhi offices.
Shreya was a Research Fellow at Vidhi.
