Circular No. IBBI/IPA/43/2021, dated 28 July 2021 - The Disciplinary Committee of an Insolvency Professional Agency (IPA) may impose a monetary penalty on its professional members under Clause 24(2)(d) of the Schedule to the IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016.
The Bankruptcy Law Reforms Committee, which conceptualised the Code, had envisaged:
"IP agencies will have the flexibility to impose a graduated system of penalties, where minor non-compliances will result in monetary fines, and major violations will result in expulsion from the agency.”
In the interest of objectivity and uniformity, it has been decided that an IPA shall amend its Bye-laws to provide for the maximum and minimum monetary penalty, where the Disciplinary Committee decides to impose such penalty on its professional members, under Clause 24(2)(d) of the Schedule to the IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016.
The IPA shall amend its Bye-Laws to incorporate Clause 24(5) of the Schedule to the IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016 as inserted by IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) (Third Amendment) Regulations, 2021.
This circular is issued in the exercise of powers under section 196 of the Insolvency and Bankruptcy Code, 2016.
This Circular shall come into force with immediate effect.
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