IBBI Introduces Key Amendments to Enhance Creditor Representation

The Insolvency and Bankruptcy Board of India (IBBI) has amended its regulations to improve creditor representation in the insolvency process. The changes, effective from September 24, 2024, aim to ensure that large creditor groups, such as homebuyers, are adequately represented during insolvency proceedings.

The Insolvency and Bankruptcy Board of India (IBBI) has announced notable amendments to the Insolvency Resolution Process for Corporate Persons norms, aimed at enhancing creditor representation in insolvency proceedings.

The IBBI released the (Second Amendment) Regulations 2024 on September 24. The new regulations provide for the appointment of an interim representative who will act for a class of creditors awaiting the approval of an authorised representative by the adjudicating authority.

This interim representative will hold the same rights and responsibilities as an authorised representative, particularly in creditor committee meetings, to ensure effective representation, especially for large groups like homebuyers who face delays in the process. These amendments are designed to maintain the efficiency and fairness of the insolvency resolution mechanism.

(With inputs from agencies.)