The Insolvency and Bankruptcy Board (IBBI) of India has notified two regulations in exercise of its powers conferred under section 240 of Insolvency and Bankruptcy Code, 2016.
The Insolvency and Bankruptcy Code, 2016 seeks to ensure time-bound settlement of insolvency, faster turnaround of businesses and create a unified database of serial defaulters.
These two regulations are IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016; IBBI (Insolvency Professional Agencies) Regulations, 2016.
- The two regulations provide (i) eligibility norms to be a Professional Member of an Insolvency Professional Agency (IPA) and (ii) norms to get registered with IBBI as an Insolvency Professional Agency.
- It allows company registered under Section 8 of the Companies Act, 2013 having a minimum net worth of Rs. 10 crore to be eligible for an IPA.
- The IPA should have over half of its Directors as independent directors and not more than one-fourth of the Directors can be insolvency professionals.
- It shall have Monitoring Committee, Membership Committee(s), Disciplinary Committee(s) and Grievance Redressal Committee(s) for the purposes of regulation and oversight of professional members.