In a move that could help streamline and quicken insolvency proceedings against firms, the government is looking to reduce the compliance burden on insolvency professionals. In this regard, the Insolvency and Bankruptcy Board of India (IBBI) has issued a discussion paper on reducing compliance by review of forms for corporate insolvency resolution process (CIRP) that are submitted by insolvency professionals.
The discussion paper has listed out a number of measures with the aim to reduce the amount of information and data that Insolvency Professionals (IPs) currently need to submit, with a special emphasis on removing duplication, making the reporting process simpler and more efficient. It has also recommended adjusting compliance deadlines to reduce the pressure caused by numerous and frequently overlapping submission dates, allowing IPs to manage their resources more effectively. Further, it has proposed simplifying the compliance process by combining various reporting systems on the websites of insolvency professional agencies and the IBBI into a single, centralised IBBI website, eliminating duplication, and making it easier for stakeholders to access and use.
“The proposed changes to the CIRP Forms and the compliance framework aim to significantly reduce the compliance burden on Insolvency Professionals while ensuring that the IBBI receives relevant and timely information for effective monitoring of the CIRP,” said the discussion paper, adding that the streamlining of forms, auto-population of data from existing sources, and the move to a monthly reporting cycle will make the compliance process more efficient and less time-consuming for IPs.
The IBBI has sought inputs from the public by July 1.
Experts have welcomed the discussion paper and said such a move would enable resolution professionals to dedicate more time to other responsibilities under the IBC.
“By proposing reforms for simplification of procedures, reduction in the amount of information sought and rationalising of deadlines, the IBBI aims to streamline the compliance obligations of Resolution Professionals, thereby leading to a simplified yet effective regulatory structure,” said Durgesh Khanapurkar, Partner, Desai & Diwanji, adding that a simplified compliance procedure will allow more time and resources to the RPs to fulfill their duties and obligations under the IBC.
“Further, it is noteworthy to mention that the reduction in information sought is only to eliminate duplication and notwithstanding simplification, IBBI will have enough information to effectively monitor the RPs’ performance and the CIR Processes,” he noted.
Nilesh Tribhuvann, Managing Partner, White and Brief – Advocates and Solicitors, said the proposals will not only reduce the administrative burden on IPs but also ensure more efficient and timely compliance. “Overall, these reforms are expected to enhance the effectiveness of the insolvency resolution process by providing a clearer and more consistent compliance framework. The move towards a more streamlined and centralised system is a positive development for all stakeholders involved in the insolvency process,” he said.
