IRP/RP Mandates to Operate Separate Bank Accounts for Real Estate Projects: IBBI notifies new Regulations [Read Notification]

The Insolvency and Bankruptcy Board of India ( IBBI ) has introduced amendments to the Insolvency and Bankruptcy Board of India ( Insolvency Resolution Process for Corporate Persons ) Regulations, 2016. These amendments aim to enhance the efficiency and transparency of the insolvency resolution process. Here's a breakdown of the key changes:

Separate Bank Account for Real Estate Projects: Newly inserted Regulation 4D mandates the operation of a separate bank account for each real estate project by the interim resolution professional or resolution professional, where applicable.

Meeting of the Committee: Regulation 18 has been revised to require the resolution professional to convene a committee meeting within thirty days from the last meeting, with provision for extension subject to quarterly meetings.

Electronic Voting System: Regulation 25(5) now allows for electronic voting on matters listed for voting, with a voting window of at least twenty-four hours, extendable on creditor request.

Approval of Committee for Insolvency Resolution Process Costs: Newly inserted Regulation 31B necessitates the approval of the committee for all costs related to the insolvency resolution process, presented by the insolvency professional at each committee meeting.

Valuation Methodology Explanation: A proviso is added to Regulation 35(1) requiring the resolution professional to facilitate a meeting where registered valuers explain the valuation methodology to committee members before computation of estimates.

Disclosure of Fair Value: Regulation 36(2) introduces a provision allowing the committee to decide not to disclose fair value if deemed beneficial for the resolution process, with reasons recorded in writing.

Resolution Plan for Each Real Estate Project: A clarification is added to Regulation 36A(1), stating that the resolution professional may invite a resolution plan for each real estate project or group of projects of the corporate debtor after committee approval.

Monitoring Committee for Resolution Plan Implementation: Regulations 38(4) and (5) empower the committee to consider and constitute a monitoring committee for the implementation of the resolution plan, with provisions for member selection and remuneration.

Continued Responsibility of Resolution Professional: A clarification in Regulation 40(2) states that the resolution professional shall continue to discharge responsibilities until the application for extension is decided by the Adjudicating Authority.

These amendments are expected to streamline and strengthen the insolvency resolution process for corporate entities, fostering greater transparency and accountability.

To Read the full text of the Order CLICK HERE

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