NEW DELHI:The Insolvency and Bankruptcy Board of India (IBBI) plans to reduce the compliance burden of debt resolution professionals so that they can concentrate on stitching together rescue plans for companies under their supervision, the bankruptcy rule-maker said.
The idea is to reduce the number of forms and volume of information that resolution professionals have to submit and to make the reporting process simpler and efficient, IBBI said in a discussion paper on lowering the compliance burden of these professionals.
The regulator has sought public feedback on its suggestions by 1 July.
The regulator said its enhanced data capture capabilities, particularly creation of a portal, needs to be leveraged to simplify and optimize the forms to be filled by professionals.
The move to cut down the amount of information sought from resolution professionals and to streamline reporting by making it a monthly affair from the current method of linking it to the various events will allow professionals to devote more time on the substantive work that they are required to carry out under the bankruptcy code, said Durgesh Khanapurkar, Partner at law firm Desai & Diwanji.
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Emphasis on removing duplication, making reporting simpler, more efficient
There will be a special emphasis on removing duplication, making the reporting process simpler and more efficient, IBBI said.
The effort is also to adjust deadlines to reduce the pressure caused by numerous and frequently overlapping submission dates, which will allow professionals to manage their resources more effectively.
Combining the reporting systems of the agencies that register, oversee and regulate debt resolution professionals and that of IBBI into a single centralized IBBI website, which will eliminate duplication, is also on cards, the regulator said.
This will make accessing information easier for every party in the bankruptcy ecosystem.
The burden of compliance faced by insolvency professionals has been alleviated with the consolidation or removal of various forms, indicating a seamless approach of the regulator, said Anjali Jain, Partner at law firm Areness.
“Insolvency professionals would now be able to manage their assignments more efficiently with a resolution-oriented approach as restricted timelines have been replaced with monthly compliances,” said Jain.
Also Read: Bankruptcy rescues have soared this year. Here is why
IBBI has been frequently refining rules to improve the outcomes of debt resolution under the bankruptcy code. In FY24, a record number of 269 resolution plans were approved by the National Company Law Tribunal, against 189 in the year before, showing a 42% improvement in rescuing distressed companies, according to data available from the regulator.
Jasmine Damkewala, Senior Partner at Delhi-based law firm Circle of Counsels said the approach suggested by the IBBI will untangle the web of intricate compliances and push the insolvency resolution process towards fruition.
“Accordingly, by simplifying the process, such corporate resolution is made more meaningful and effective,” said Damkewala. She said that under IBC process, the resolution professional taking over ineffective or unscrupulous management under court orders, gives a new lease of life to the company and the chance at stepping out of financial sickness.
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Published: 11 Jun 2024, 07:37 PM IST
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