Government Streamlines Insolvency Proceedings, Reducing Compliance Burden for Professionals

Government Streamlines Insolvency Proceedings, Reducing Compliance Burden for Professionals

IBBI Proposes Reduced Compliance Burden

The Indian government is taking steps to streamline and expedite insolvency proceedings against companies by reducing the compliance burden on insolvency professionals. The Insolvency and Bankruptcy Board of India (IBBI) has released a discussion paper outlining proposed changes to the Corporate Insolvency Resolution Process (CIRP) forms and compliance framework.

The paper aims to reduce the amount of information and data that insolvency professionals (IPs) need to submit, with a focus on eliminating duplication and simplifying the reporting process. It also proposes adjusting compliance deadlines to alleviate pressure caused by overlapping submission dates. Additionally, the IBBI suggests consolidating various reporting systems into a single, centralized website for easier access and use.

These proposed changes aim to significantly reduce the compliance burden on IPs while ensuring the IBBI receives relevant and timely information for effective CIRP monitoring. The streamlining of forms, auto-population of data, and a shift to a monthly reporting cycle will make the compliance process more efficient and less time-consuming for IPs.

The IBBI has invited public feedback on the discussion paper by July 1st. Experts have welcomed the initiative, stating that it will allow resolution professionals to dedicate more time to other responsibilities under the Insolvency and Bankruptcy Code (IBC).

The proposed reforms aim to simplify procedures, reduce information requirements, and rationalize deadlines, leading to a more streamlined and effective regulatory structure. This will allow IPs more time and resources to fulfill their duties under the IBC.

Furthermore, the reduction in information sought is intended to eliminate duplication while ensuring the IBBI retains sufficient information to effectively monitor the performance of IPs and the CIRP process.

The proposals are expected to not only reduce the administrative burden on IPs but also ensure more efficient and timely compliance. This will enhance the effectiveness of the insolvency resolution process by providing a clearer and more consistent compliance framework. The move towards a more streamlined and centralized system is a positive development for all stakeholders involved in the insolvency process.