IBBI proposes mandatory audit of insolvency resolution process costs

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Last Updated13/06/2023

Insolvency regulator, IBBI, proposes to stipulate mandatory audit of Insolvency Resolution Process Costs (IRPC) in resolution cases where the assets of the corporate debtor (CD) is in excess of ₹ 100 crore.

It was established on 1st October 2016 under the Insolvency and Bankruptcy Code (IBC), 2016.
It is responsible for the implementation of the IBC. The IBC amends and consolidates the laws relating to insolvency resolution of individuals, partnership firms and corporate persons in a time-bound manner.

The IBBI regulates professionals as well as processes.
It has regulatory oversight over the insolvency professional agencies, insolvency professional entities, insolvency professionals and information utilities.
It enforces rules for processes of corporate insolvency resolution, individual insolvency resolution, corporate liquidation and individual bankruptcy under the IBC.
It specifies the minimum eligibility requirements for registration of insolvency professional agencies, insolvency professionals and information utilities and curriculum for the qualifying examination of the, insolvency professionals for their enrolment.
It collects and maintains records relating to insolvency and bankruptcy cases and disseminate information relating to such cases.

The Board consists of the following members who are appointed by the Central Government,
A Chairperson.
Three members from among the officers of the Central Government equivalent or not below the rank of a Joint Secretary. Out of the three members, each will represent the Ministry of Finance, Ministry of Corporate Affairs and Ministry of Law, ex -officio.
One member nominated by the RBI (Reserve Bank of India), ex-officio.
Five other members nominated by the Central Government, out of which at least three should be whole-time members.
The term of office of the Chairperson and members (other than ex-officio members) is five years or until they attain sixty-five years, whichever is earlier, and they are eligible for re-appointment.