IBBI Releases Discussion Paper on Review of Limit on Number of Assignments Being Handled by Insolvency Professionals

The Insolvency and Bankruptcy Board of India (IBBI) issued a discussion paper on August 12, 2025, addressing concerns over the concentration of insolvency assignments among a limited number of Insolvency Professionals (IPs) leading to delays in insolvency and liquidation processes. The discussion paper proposes amendments to Regulations to impose aggregate limits on the number of assignments an IP can handle, including Interim Resolution Professional (IRP), Resolution Professional (RP), and Liquidator roles, to ensure fair distribution and enhance efficiency.

1. Issue: The current Code of Conduct restricts an IP to a maximum of 10 assignments as RP in Corporate Insolvency resolution Process (CIRP), with not more than 3 involving admitted claims over INR 1000 crore. However, this limit excludes assignments as IRP or Liquidator, resulting in certain IPs handling disproportionately high numbers of total assignments (up to 25 in some cases), leading to concerns about the quality of resolution, inclusiveness, and equitable opportunities for new professionals. 

2. Proposed Solution:

• • • Delete Clause 22 of the Code of Conduct specified in First Schedule under Regulation 7(2)(h) of IBBI (Insolvency Professionals) Regulations, 2016 (IP Regulations) and introduce a new regulation capping an IP’s assignments in the aggregate of IRP, RP, and Liquidator roles at 10, with a maximum of 3 assignments exceeding INR 1000 crore admitted claims each. IPs currently exceeding the threshold will be prohibited from accepting new assignments till their number falls below the limit.

• • • The proposal continues to exclude assignments related to insolvency of personal guarantors as the framework for these proceedings is evolving separately. Additionally, the proposed framework does not, at this stage, prescribe any cap on the number of assignments undertaken through an Insolvency Professional Entity.