Study Recommends Individual IPs for Handling Insolvency Cases up to Rs 100 Crore

Indian Institute of Insolvency Professionals Calls for Restructuring of Insolvency Framework

A recent study by the Indian Institute of Insolvency Professionals of ICAI (IIIP-ICAI) has made key recommendations to improve the regulatory framework for insolvency professionals and entities. The study, titled 'Improving the Regulatory Framework for IPs/IPEs and Strengthening the Profession', was conducted to address the challenges faced by insolvency professionals (IPs) in India.

According to the study, smaller insolvency cases involving debt up to Rs 100 crore should be handled exclusively by individual IPs. In contrast, larger and more complex cases involving debt above Rs 500 crore should be assigned to Insolvency Professional Entities (IPEs). The middle bracket of cases, ranging from Rs 100 crore to Rs 500 crore, may be left to the discretion of stakeholders.

The study highlights the crucial role of IPs in the Insolvency and Bankruptcy Code (IBC) framework, which provides for the resolution of stressed assets in a time-bound and market-linked manner. To further enhance their capabilities, the study recommends expanding the role of IPs into related domains, such as the banking sector for the restructuring of non-performing asset (NPA) accounts and the corporate sector in advisory capacities.

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In addition to these recommendations, the study suggests increasing the age limit for IPs from 70 to 75 years. This move aims to enable experienced professionals to continue contributing to the insolvency profession.

The IIIP-ICAI is promoted by the Institute of Chartered Accountants of India (ICAI) and is dedicated to promoting the growth and development of the insolvency profession in India.