New Delhi: Regulator IBBI has allowed Insolvency Professional Entities (IPEs) to act as insolvency professionals, a move that is likely to help in speedier resolution process. Till now, only individuals were permitted to register as insolvency professionals under the Insolvency and Bankruptcy Code (IBC), which provides for a market-linked and time-bound resolution of stressed assets.
"Considering the limitations on the part of an Insolvency Professional (IP), being an individual, in dealing with processes under the Code requiring concurrent efforts, and multi-disciplinary expertise, the board decided to institutionalise the profession of IP," the regulator said in a release on Friday.
The Insolvency and Bankruptcy Board of India (IBBI) is a key institution in the implementation of the Code, which came into force in 2016.
It has amended the regulations governing IPs to enable recognised IPEs to carry on the activities of IPs.
"An IPE, recognised by the board, can seek registration as an IP with the board, by making an application in the specified form along with a non-refundable application fee of two lakh rupees," the release said.
Such an IPE can only allow its partner or director, as the case may be, who is an IP and holds a valid authorisation for assignment, to sign and act on behalf of it.
According to IBBI, the Code has created a strong ecosystem in insolvency regime which is expanding in terms of number of service providers and number of cases using the Code as a rescue mechanism for distressed firms.
The Code has rescued 1,934 corporate debtors — 517 through resolution plans, 774 through appeal or review or settlement and 643 through withdrawal — till June 2022. In value terms, around 69 per cent of distressed assets which entered the process under the Code have been resolved, as per the regulator.
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