IBBI tightens norms governing resolution professionals (RPs)

Insolvency and Bankruptcy Board of India (IBBI) has tightened norms that governs resolution professionals (RPs), wherein they would be barred from having employment when they are in possession of authorisation to take up work under insolvency law. Also, restrictions will also be in place for relatives of RPs in accepting employment after completion of resolution process. For this purpose IBBI has amended respective regulations.

IBBI (Insolvency Professionals) Regulations, 2019

With this notified regulation Insolvency and Bankruptcy Board of India amends Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016.

Salient Amendments effected are:

• An Insolvency Professional (IP) should not take up any assignment unless he/she holds an Authorisation for Assignment issued by insolvency professional agency concerned. This provision is effective from 1 January 2020. This would be applicable for an individual acting as an interim resolution professional, (or resolution professional), bankruptcy trustee, liquidator, authorised representative or in any other role under Insolvency and bankruptcy Code (IBC), 2016.
• An Insolvency Professional (IP) should not engage in any employment when he holds an Authorisation for Assignment/when he is undertaking an assignment. Although he may surrender Authorisation for Assignment when he wishes to take up employment.
• Resolution professional, and his or her relatives, cannot accept any employment (other than an employment secured through open competitive recruitment) from successful resolution applicant concerned for one year.
• Insolvency professional shall not appoint any of his relatives or related parties, in connection with any work relating to any of his assignment.

IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) (Amendment) Regulations, 2019

Salient Amendments effected are:

• An insolvency professional agency shall issue or renew an Authorisation for Assignment to insolvency professionals in accordance with its Bye-Laws.
• An individual would be permitted to serve as an independent director on governing board of an insolvency professional agency up to age of 75 years.

About Insolvency and Bankruptcy Board of India (IBBI)

It was formed on 1 October 2016. It was given statutory powers under Insolvency and Bankruptcy Code (IBC), 2016.

It regulates and counters various bad loan cases reported by various creditors, which especially involved banks in India.

It also regulates profession and processes related to insolvency and bankruptcy.

It plays the role of governing body for all Insolvency Resolution Professionals (IRP), Insolvency Professional Agencies (IPA) and Information Utilities (IU).

Month: Current Affairs - July, 2019