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The Indian Institute of Insolvency Professionals of ICAI (IIIP-ICAI) has recommended a tiered allocation of insolvency cases based on debt size, suggesting that cases up to INR 100 crore be handled exclusively by individual insolvency professionals, while those exceeding INR 500 crore be assigned to insolvency professional entities. The proposals form part of a study aimed at addressing operational challenges within the Insolvency and Bankruptcy Code (IBC) ecosystem, including valuation complexities and stakeholder coordination issues. The report also suggests expanding the role of insolvency professionals into advisory and restructuring functions beyond IBC proceedings, alongside increasing the upper age limit for practitioners. The recommendations are intended to improve efficiency, specialisation and capacity within India’s insolvency resolution framework.
The Indian Institute of Insolvency Professionals of ICAI (IIIP-ICAI) has proposed a structured framework for allocating insolvency cases based on debt thresholds, recommending that cases involving debt up to INR 100 crore be handled exclusively by individual insolvency professionals (IPs), while those exceeding INR 500 crore be assigned to insolvency professional entities (IPEs), as part of efforts to strengthen the Insolvency and Bankruptcy Code (IBC) ecosystem. The recommendations were outlined in a study released earlier in the past week. Advertisement
According to the study, cases falling within the mid-range bracket of INR 100 crore to INR 500 crore may be assigned flexibly, depending on stakeholder preference and the specific requirements of each resolution process. The institute indicated that such a differentiated approach could improve efficiency by aligning the scale and complexity of cases with the capabilities and resources of professionals handling them.
The recommendations have been made against the backdrop of operational challenges faced by insolvency professionals, including limited access to timely information, complexities in asset valuation, coordination issues among stakeholders, and constraints in available resources. The study suggested that a more structured allocation system could help address these issues while improving overall resolution outcomes.
Insolvency professionals play a central role within the IBC framework, which provides a time-bound mechanism for resolving stressed assets through market-driven processes. By categorising cases based on size, the institute indicated that smaller matters could be managed more efficiently by individual professionals, while larger and more complex cases would benefit from the institutional capacity and multidisciplinary expertise available within insolvency professional entities.
In addition to case allocation, the study has proposed expanding the scope of insolvency professionals beyond the IBC framework into related areas such as restructuring of non-performing assets within the banking sector and advisory roles in corporate restructuring. This expansion is aimed at leveraging the expertise of insolvency professionals in a wider set of financial and corporate processes.
The institute has also recommended increasing the upper age limit for insolvency professionals from 70 to 75 years, indicating that experienced practitioners could continue to contribute to the sector for a longer duration. The proposal reflects a broader effort to enhance capacity within the profession while retaining institutional knowledge.
The IIIP-ICAI, which is promoted by the Institute of Chartered Accountants of India, indicated that the study aims to support regulatory improvements and strengthen the functioning of insolvency professionals and entities within the IBC framework. The recommendations are expected to contribute to ongoing discussions around improving efficiency, transparency and outcomes in India’s insolvency resolution processes.
Source - PTI
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