The Insolvency and Bankruptcy Board of India (IBBI) has notified the Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) (Amendment) Regulations, 2026, bringing significant changes to the governance structure of Insolvency Professional Agencies (IPAs). The amendment regulations were published in the Official Gazette on May 13, 2026 and came into force immediately upon publication.
The newly notified regulations amend the existing 2016 framework governing the constitution and functioning of the governing boards of Insolvency Professional Agencies established under the Insolvency and Bankruptcy Code, 2016. The amendments focus on strengthening oversight, enhancing governance standards, and tightening eligibility conditions for independent directors and managing directors of IPAs.
One of the most significant changes introduced by the amendment is the insertion of the concept of a “nominee director” on the governing board of an Insolvency Professional Agency. The amended Regulation 5 now expressly includes a nominee director as part of the governing board structure. The regulations further clarify that while calculating the minimum requirement of seven directors on the board, the nominee director nominated by the IBBI will be excluded from such count.
The amendment also empowers the IBBI to nominate one individual as its nominee director on the governing board of an Insolvency Professional Agency. The regulation specifically provides that such nominee director shall enjoy the same status, rights, duties, powers, and responsibilities as other directors of the governing board. This move is expected to strengthen regulatory supervision and ensure closer oversight over the functioning of IPAs.
Further, the IBBI has tightened the eligibility norms relating to independent directors. The amendment inserts new disqualifications providing that an independent director cannot be a member of any statutory regulator that has sponsored or promoted the insolvency professional agency or holds direct or indirect shareholding or control over such agency. Additionally, a person serving as an independent director in another Insolvency Professional Agency will also be ineligible.
Another important governance reform pertains to the tenure and reappointment of directors. The substituted sub-regulation now provides that a second term for a director will be subject to a satisfactory performance review of the first term by the Governing Board and prior approval of the IBBI. This provision introduces a formal performance evaluation mechanism before extension of tenure.
The amendment regulations also introduce a procedural safeguard regarding the appointment or renewal of appointment of the Managing Director of an Insolvency Professional Agency. Under the newly inserted Regulation 5A(6A), an IPA seeking prior approval of the Board for appointment or renewal of its Managing Director will now be required to forward at least two names to the IBBI at least one month before the expiry of the tenure of the existing Managing Director.
The amendments are being viewed as part of the IBBI’s broader effort to strengthen institutional governance standards in the insolvency ecosystem. By introducing nominee directors, stricter independence norms, performance-linked continuation of directors, and enhanced scrutiny in managing director appointments, the regulator appears to be seeking greater transparency, accountability, and regulatory oversight in the functioning of Insolvency Professional Agencies
Notification Details
Date: 13/05/2026
