In a bid to expedite the corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code (IBC), the government is mulling to reduce compliance burden on insolvency professionals (IPs). In a discussion paper floated on Monday, the Insolvency and Bankruptcy Board of India (IBBI) has proposed to streamline and reduce the number of CIRP forms filed by IPs by merging, dropping, and revamping certain forms.
Currently, the timelines for filing various CIRP forms – nine in total – are linked to different events such as the insolvency commencement date, public announcement, appointment of RP, etc. This leads to due dates for filing of forms falling on different dates for an IP handling multiple CIRP assignments, making the filing process cumbersome for the IP.
Hence, to streamline the process, it is proposed to move to a monthly compliance reporting framework. IPs will be required to report the status and progress of the CIRP as on the last day of every month, by filing the applicable forms by 10th day of the following month, said the IBBI in the paper. The proposed changes include merging nine forms into just five.
The revised forms and filing timelines aim to minimise duplicate submissions, auto-populate fields from existing data to the extent possible, seek information relevant to the stage of CIRP and streamline the compliance process, said the IBBI. “This will help reduce the time and effort required for compliance by IPs,” it said. Experts have welcomed the proposed changes, and say that the move is aimed to plug in the governance misses or rather, fine tune the over- compliance requirements under the CIRP.
“These proposed changes are contributing to the procedural and substantive vitality as IPs would now be able to focus on various complex resolution assignments and submit monthly updates/reports in one go without usual apprehensions of delays or lapses,” said Anjali Jain, partner at Areness.
Further, Siddharth Mody, partner, J.Sagar Associates points out that there is a proposal to shift to a monthly reporting cycle by IBBI, which would reduce the compliance burden for insolvency professionals and make the process “efficient”. The discussion paper says that due to the reduction in the number of forms being filed, the IBBI will also get a consolidated monthly update on the status of all CIRPs. For instance, an IP handling three CIRP cases with different insolvency commencement dates in January month would file Form CIRP-1 for all three cases by 10th February, reflecting the status as on 31st January.