IBBI Issues Revised Guidelines for Appointment of Insolvency Professionals

The Insolvency and Bankruptcy Board of India (IBBI) has issued the ‘Insolvency Professionals to Act as Interim Resolution Professionals, Liquidators, Resolution Professionals, and Bankruptcy Trustees (Recommendation) (Second) Guidelines, 2024’, effective from January 1, 2025, to June 30, 2025. The revised guidelines aim to streamline the process for preparing a panel of Insolvency Professionals (IPs) for appointment under the Insolvency and Bankruptcy Code, 2016, ensuring efficiency and reducing administrative delays.

Under the Code, the IBBI is required to recommend the name of an IP to the National Company Law Tribunal (NCLT) and Debt Recovery Tribunal (DRT) for roles such as Interim Resolution Professional (IRP), Resolution Professional (RP), Liquidator, and Bankruptcy Trustee (BT). To avoid delays, the IBBI now prepares a zone-wise panel of eligible IPs in advance, which will be shared with adjudicating authorities.

Key Provisions of the Guidelines

• Eligibility Criteria: To qualify for inclusion in the panel, an IP must:
  • Have no disciplinary proceedings pending with the IBBI or the Insolvency Professional Agency (IPA).
  • Not have been convicted by a court in the last three years.
  • Submit an expression of interest and consent to act in the designated roles.
  • Hold a valid Authorization for Assignment (AFA) for the entire panel validity period.

• Panel Preparation: A common panel of IPs will be prepared and shared with the NCLT and DRT. The panel will be organized zone-wise based on the registered office address of the IP. The adjudicating authority may appoint IPs from this panel at their discretion.
• Expression of Interest: IPs must submit their expression of interest in Form A by December 22, 2024. They must also specify sectors they have experience handling under the Code. Submitting the form signifies unconditional consent to act in designated roles if appointed.
• Scoring and Ranking: IPs are ranked based on completed assignments, prioritizing those with higher experience. In case of a tie, the registration date with the IBBI determines the order, with earlier registrations prioritized.
• Conditions for IPs: Inclusion in the panel constitutes acceptance to act in the appointed role unless otherwise permitted by law. Refusal to accept appointments without sufficient justification may lead to removal from the panel for six months. IPs are expected to retain their registration and AFA during the panel’s validity.

The new guidelines replace the guidelines issued in June 2024, with updated provisions and eligibility criteria. The IBBI has reaffirmed its commitment to ensuring seamless and transparent appointment processes under the Code.