The new regulation takes into account the fact that many candidates who have degrees in law may be working in the field of law but may not be practicing in a court. They are now eligible to be hired as insolvency professionals
New Delhi: The Insolvency and Bankruptcy Board of India (IBBI) has revised the eligibility requirements for insolvency professionals hired to run companies undergoing bankruptcy proceedings.
Insolvency professionals are required to have experience in professional fields such as management, law, chartered accountancy, company secretaryship and cost accounting. The new changes give more flexibility to professionals given that some of them may have experience in more than one discipline. The new regulation also takes into account the fact that many candidates who have degrees in law may be working in the field of law but may not be practising in a court. They are now eligible to be insolvency professionals. The changes came into effect from Thursday, according to the IBBI (Insolvency Professionals) (second amendment) regulations, 2021.
Till now, for those in the field of management, a minimum of 15 years of experience was required after the completion of a Bachelor’s degree in order to be eligible for the role of an insolvency professional. The new regulation, however, makes management professionals with 10 years of experience and a Master’s degree or a two-year full-time post graduate (PG) Diploma in Management eligible as well. Alternatively, a minimum of experience of 15 years is required following a Bachelor’s degree in management.
In the case of those qualified in law, 10 years of experience in the field of law after a Bachelor’s degree is sufficient. Earlier, 10 years of experience as an advocate was needed.
In the case of professionals such as chartered accountants, cost accountants, company secretaries and advocates, more flexibility has been given. Accordingly, a person with six years of experience as a charted accountant and four years as an advocate is eligible to become an insolvency professional subject to meeting other requirements.
Recently, the IBBI barred insolvency professionals from continuing in that role if any of their colleagues in the same professional services firm represented any of the parties in the case they are handling, to avoid conflict of interest.