The Insolvency and Bankruptcy Board of India (IBBI) has notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2026, introducing a significant change in the Corporate Insolvency Resolution Process (CIRP) framework for Micro, Small and Medium Enterprises (MSMEs).
The amendment was notified on 19 May 2026 and came into effect immediately upon publication in the Official Gazette.
The amendment specifically modifies Regulation 27 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Under the newly inserted proviso, where the corporate debtor is classified as an MSME under Section 7(1) of the Micro, Small and Medium Enterprises Development Act, 2006, the Resolution Professional (RP) will appoint only one set of registered valuers as a default rule.
Prior to this amendment, insolvency proceedings generally involved the appointment of two registered valuers for determining fair value and liquidation value of the assets of the corporate debtor. The new framework creates a special dispensation for MSME entities and seeks to reduce procedural burdens in such cases.
However, the amendment also retains flexibility within the process. The Committee of Creditors (CoC) may still decide to appoint two sets of registered valuers if it considers such appointment necessary. The regulation specifically requires that such a decision be supported by recorded reasons in writing.
The move appears aimed at streamlining insolvency proceedings involving smaller businesses. MSMEs often face cost constraints and shorter operational runways compared with larger enterprises. By reducing the requirement from two valuation exercises to one as a standard practice, the amendment may help lower resolution costs and potentially speed up insolvency proceedings.
Valuation plays a critical role in CIRP because it forms the basis for assessing the corporate debtor’s assets and assists stakeholders in evaluating resolution plans. Since valuation exercises can involve significant professional costs and time commitments, the relaxation for MSMEs may ease financial pressure on distressed businesses undergoing insolvency proceedings.
The notification also records that the principal regulations were originally notified on 30 November 2016 and had last been amended in February 2026 before the present amendment.
Notification Details
Date: 19/05/2026
