New Delhi: In view of the shortage of qualified professionals in India who can rescue companies in financial distress, the bankruptcy board has asked leading institutions to offer postgraduate courses in insolvency resolution.
According to the Insolvency and Bankruptcy Board of India (IBBI), a two-year degree allows a graduate in certain disciplines such as accountancy, law, finance and economics to become a bankruptcy resolution professional without having to wait for the 10 years of experience normally required.
The bankruptcy regulator has asked for applications to be submitted by September 27 to institutions with “quality residential facilities for at least 100 students at a time” and “a reasonably large campus with sufficient room for expansion” to offer postgraduate programs.
The institution must have quality educational infrastructure such as classrooms, library, computer lab, research centres, journals, publications and technology, with opportunities for expansion of these facilities.
Currently, only two institutions offer a postgraduate diploma in insolvency programme (PGIP): the Indian Institute of Corporate Affairs and the National Law Institute University, Bhopal. Currently, there are over 4,400 registered insolvency professionals in the country.
Also read: Insolvency law reforms should aim for swift and fair resolutions
Experts believe that this move will lead to more staff able to handle the complex tasks of debt restructuring and business rescue.
Unlike previous initiatives, this time IBBI has included additional conditions, allowing it to select multiple institutions, amend expressions of interest or reject them without giving reasons, ensuring that only the best institutions are chosen, said Yogendra Aldak, partner at Lakshmikumaran and Sridharan Attorneys.
“With the additional conditions, we can see IBBI selecting multiple institutions to deliver PGIP courses and that would result in more students becoming insolvency professionals with relevant skills and experience,” Aldak said.
According to Aldak, such insolvency professionals can help simplify and expedite insolvency proceedings in India, protect creditors and revive companies in a timely manner.
The Ministry of Corporate Affairs and IBBI aim to increase the number of bankruptcy cases resolved per year, shorten the time taken to process and improve the outcome of debt restructuring.
Also read: IBC Story of Delay: Speed Up Insolvency Processing to Make This Reform Shine
In FY 2024, a record 269 resolution plans were approved by the National Company Law Tribunal, up from 189 the previous year, a 42% improvement in rescuing distressed companies. Coin reported on June 11.
According to IBBI, an insolvency professional plays a central role in the resolution, liquidation and bankruptcy processes of companies and individuals, acting as “the fulcrum of the process and the link between the deciding authority and the stakeholders”.
Also read: Mint Explainer: Why bankruptcy reform should be the new administration's top priority
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