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Informist, Thursday, May 14, 2026

 

NEW DELHI – The Insolvency and Bankruptcy Board of India has amended the law for adding its nominee in the insolvency professional agencies' governing board. The insolvency board shall nominate one individual as its nominee director on the governing board of an insolvency professional agency, and such nominee director shall have the same status, rights, duties, powers and responsibilities as other directors of the governing board, said the insolvency regulator.

 

The insolvency law prescribes a two-tier regulatory architecture with Insolvency and Bankruptcy Board of India as the principal regulator and insolvency professional agencies as frontline regulators for dealing with insolvency professionals. The insolvency professional agencies are registered with the bankruptcy board and are subject to the latter's oversight. The Insolvency and Bankruptcy Code, 2016 empowers the bankruptcy board to promote the development and regulate the working and practices of the insolvency professional agencies and monitor their performance. The resolution professional and liquidator for debt-ridden companies are appointed from these insolvency professional agencies. 

 

The insolvency professional agencies monitor the conduct and performance of their members and also initiate appropriate action against their members who do not comply with the provisions of the 2016 code. The governing board acts as the highest authority in these agencies providing strategic direction, oversight, and accountability. Before the amendment, the governing board included a managing director, independent directors and shareholder directors. 

 

Further, the board added two more eligibility criteria for appointment of independent director the insolvency professional agencies' governing board. The independent director shall not be a member of any statutory regulator that has sponsored or promoted the insolvency professional agency or that directly or indirectly holds shareholding in such an agency and it should not be an independent director of any other insolvency professional agency.  End

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury 

 

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