The Insolvency and Bankruptcy Board of India (IBBI) has notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2026.
Representation of Operational Creditors:
Regulation 16 has been amended to provide that the operational creditors’ representative committee shall comprise the eighteen largest unrelated operational creditors. Further, where the number of such unrelated operational creditors is less than eighteen, all such creditors shall be included in the committee.
Assistance to committee where creditors other than scheduled banks or public financial institutions hold significant voting share.
A new Regulation 16E has been inserted providing that where creditors other than scheduled banks or public financial institutions hold more than 66% voting share in the CoC, the Resolution Professional shall invite the five largest unrelated operational creditors, including the three largest statutory authorities based on admitted claims, to attend CoC meetings as observers without voting rights. The Resolution Professional is also required to record their observations, if any, in the minutes of the CoC meetings.
Approval of committee for insolvency resolution process costs.
Regulation 31B has been substituted to require that all insolvency resolution process costs incurred up to the first CoC meeting, together with the justification for such costs, be placed before the CoC for approval. The Resolution Professional must also prepare and place a Going Concern Assessment Report covering estimated income, expenditure, cash flows, working capital requirements, and material risks of value erosion. Based on this report, the CoC shall determine whether the operations of the corporate debtor should continue and, if so, the scope and duration of such operations. After the first CoC meeting, all CIRP costs may be incurred only with prior approval of the CoC.
Enhanced Recording of CoC Deliberations
Regulation 39 has been amended to require the CoC to record its deliberations and rationale regarding
(i) the feasibility and viability of each resolution plan,
(ii) the expected realisable value to creditors as compared to the fair value and liquidation value, and
(iii) the adequacy of market discovery undertaken during the CIRP, including the use of a challenge mechanism or re-invitation of resolution plans, wherever applicable.
