IBBI Streamlines MSME Liquidation: Single Valuer for Each Asset Class

The Insolvency and Bankruptcy Board of India (IBBI) has amended the Liquidation Process Regulations, 2016, to simplify valuation procedures for micro, small, and medium enterprises (MSMEs). The change, notified through the Liquidation Process (Third Amendment) Regulations, 2026, allows the appointment of a single registered valuer for each asset class of an MSME undergoing liquidation.

Under the revised framework, the liquidator will now appoint one registered valuerper asset class for MSME corporate debtors, instead of the earlier requirement of two. So the liquidator may still engage two valuers if, after consulting the consultation committee, they record written reasons for doing so.

In the amendment, the IBBI has quoted “Provided that, in respect of a corporate debtor classified as a micro, small or medium enterprise under sub-section (1) of section 7 of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006), the liquidator shall appoint one registered valuer for each asset class of the corporate debtor,

unless the liquidator after consultation with the consultation committee decides, for reasons to be recorded in writing, to appoint two registered valuers.”

3. In the principal regulations, in regulation 35, in proviso to sub-regulation (2), after the word “Provided”, the word “further” shall be inserted.”

So mainly, the amendment, issued under Sections 196 and 240 of the Insolvency and Bankruptcy Code, 2016, aims to reduce compliance costs and expedite liquidation for smaller enterprises. It also inserts the word “further” in Regulation 35(2) to refine the existing proviso, ensuring consistency in the regulatory text.

The notification, signed by IBBI Chairperson Ravi Mittal, takes effect immediately upon its publication in the Official Gazette.

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