In exercise of the powers conferred by sections 196, 203 and 205 read with section 240 of the Insolvency and Bankruptcy

## Report on the Insolvency and Bankruptcy Board of India Model Bye-Laws and Governing Board of Insolvency Professional Agencies Third Amendment Regulations, 2021 **1. Executive Summary:** This report analyzes the Insolvency and Bankruptcy Board of India (IBBI) Model Bye-Laws and Governing Board of Insolvency Professional Agencies Third Amendment Regulations, 2021, based on the official notification. This amendment modifies the 2016 regulations, specifically altering the procedure for handling monetary penalties imposed by the Disciplinary Committee of Insolvency Professional Agencies. The core purpose of the amendment, as inferred from the text, is to ensure the prompt realization and appropriate allocation of monetary penalties to the Fund constituted under section 222 of the Insolvency and Bankruptcy Code, 2016. **2. Introduction:** This report aims to provide a clear and concise overview of the Insolvency and Bankruptcy Board of India Model Bye-Laws and Governing Board of Insolvency Professional Agencies Third Amendment Regulations, 2021, based solely on the information contained within the provided policy text. The analysis will focus on the key changes introduced by the amendment and their likely implications. **3. Policy Overview:** * **Amendment:** This is an amendment to the Insolvency and Bankruptcy Board of India Model Bye-Laws and Governing Board of Insolvency Professional Agencies Regulations, 2016. * **Core Objective(s):** To streamline and clarify the process of handling monetary penalties imposed by the Disciplinary Committee of Insolvency Professional Agencies, ensuring funds are credited to the Fund constituted under section 222 of the Code in a timely manner. **4. Background and Rationale:** The amendment appears to address a potential ambiguity or inefficiency in the existing 2016 regulations regarding the handling of monetary penalties. By explicitly stating that the agency "shall promptly realize the monetary penalty," the amendment aims to eliminate any delays or uncertainties in the collection and allocation of these funds. This suggests a possible prior issue with the timely remittance of penalties, which this amendment seeks to rectify. **5. Key Provisions / Changes:** * **Specific Part of the Original Policy Changed:** Clause 24, sub-clause 5 of the Schedule within the Insolvency and Bankruptcy Board of India Model Bye-Laws and Governing Board of Insolvency Professional Agencies Regulations, 2016. * **New Rule/Provision:** The sub-clause is substituted with the following: "The Agency shall promptly realise the monetary penalty imposed by the Disciplinary Committee and credit the same to the Fund constituted under section 222 of the Code." * **Difference/Effect of the Change:** This change mandates a specific and immediate action – the prompt realization of monetary penalties. The previous wording is not available, but this change ensures that agencies cannot delay or fail to collect and remit penalties to the designated fund under section 222. It emphasizes accountability and the correct handling of funds derived from disciplinary actions. **6. Target Audience and Stakeholders:** The primary target audience includes: * **Insolvency Professional Agencies (IPAs):** These agencies are directly responsible for implementing the amended regulation concerning the prompt realization and crediting of monetary penalties. * **Disciplinary Committees of IPAs:** Their decisions regarding monetary penalties are directly linked to the implementation of this regulation. * **Insolvency and Bankruptcy Board of India (IBBI):** The IBBI is responsible for overseeing the implementation and enforcement of these regulations. **7. Implementation Aspects (Inferred):** * **Responsible Agency/Bodies:** Insolvency Professional Agencies are explicitly responsible for realizing and crediting the penalties. The IBBI oversees the implementation. * **Timelines or Procedures:** The key term "promptly" implies an expectation of swift action without undue delay. No specific timelines are defined in this text, but the intent is clear. * **Specific to Changes:** The IPAs need to establish procedures for the prompt realization and crediting of penalties that align with this amendment. **8. Expected Outcomes / Impact of Changes:** The likely intended outcome of this amendment is to: * **Ensure Timely Collection and Allocation of Funds:** By mandating prompt realization of penalties, the amendment aims to ensure that the fund constituted under section 222 receives the due amounts without delay. * **Enhance Accountability:** It reinforces the responsibility of IPAs in handling disciplinary matters and associated monetary penalties. * **Strengthen the Disciplinary Process:** The amendment contributes to the overall effectiveness of the disciplinary process by ensuring that penalties are promptly enforced. **9. Conclusion:** The Insolvency and Bankruptcy Board of India Model Bye-Laws and Governing Board of Insolvency Professional Agencies Third Amendment Regulations, 2021, represents a targeted effort to improve the efficiency and accountability of the disciplinary process within the insolvency framework. By focusing on the timely realization and allocation of monetary penalties, the amendment aims to strengthen the overall governance and financial integrity of the system, ensuring funds from penalties are properly managed and utilized as intended under section 222 of the Insolvency and Bankruptcy Code, 2016.

Key Entities Referenced