Executive Summary:
This document contains the Insolvency and Bankruptcy Board of India Model Bye-Laws and Governing Board of Insolvency Professional Agencies Amendment Regulations, 2018. It amends the 2016 regulations, focusing on the composition of the Governing Board and the role of the Managing Director. Existing agencies must comply with the amended regulations within one year of the commencement of these regulations (October 11, 2018).
Key Points / Main Content:
Governing Board Composition:
* The Governing Board must include a managing director, independent directors, and shareholder directors, with a minimum of seven directors.
* The managing director cannot be classified as either an independent or a shareholder director.
* More than half of the directors must be residents of India during their appointment and tenure.
* The number of independent directors must not be less than the number of shareholder directors, and meetings require at least one independent director present.
Independent Director Requirements:
* Independent directors must demonstrate ability, integrity, and expertise in finance, law, management, or insolvency.
* They cannot be insolvency professionals, relatives of other directors, or have had specific recent financial relationships with the agency or its major shareholders.
* Independent directors are nominated by the Board from a list proposed by the insolvency professional agency.
* Terms are limited to a maximum of two terms of three years each, or up to the age of seventy, whichever is earlier, subject to performance review for the second term.
* A three-year cooling-off period is required before an independent director can become a shareholder director.
* Independent directors must be elected as the Chairperson of the Governing Board.
Managing Director Provisions:
* The Insolvency Professional Agency determines qualification, experience, appointment, and terms, subject to Board guidelines.
* Selection requires open advertisement in a national newspaper.
* The age limit for joining is 55 (relaxable to 60 with justification), and individuals cannot serve past 65.
* Appointments are for a tenure of three to five years, with a maximum of two terms, and re-appointment requires a fresh process.
* Appointment and remuneration are subject to approval by a compensation committee and the Board.
* The Board must approve appointment, renewal, and termination of service.
* The Governing Board, with Board approval, can remove the Managing Director for failure to comply with regulations or misconduct.
* The Board can remove or terminate services "suo motu" (on its own motion) in the interest of stakeholders or the public, after providing a hearing.
* The Managing director shall be an ex-officio member of Membership Committee, Monitoring Committee, Grievance Redressal Committee and Disciplinary Committee.
Compliance:
* Existing Insolvency Professional Agencies must comply with regulations 5 and 5A within one year of the regulations' commencement (October 11, 2018).
Impact Analysis:
Insolvency Professional Agencies:
* Impact: Must restructure their Governing Boards and Managing Director appointments to comply with the new regulations.
* Action Required: Review and revise internal policies and board compositions, and implement changes within one year of the regulations' commencement.
Governing Board Members (Existing and Prospective):
* Impact: Current and potential board members must meet new eligibility criteria and understand term limits and responsibilities.
* Action Required: Assess their eligibility and willingness to serve under the new regulations.
Managing Directors (Existing and Prospective):
* Impact: MDs are subject to new appointment procedures, age limits, and potential for removal.
* Action Required: Ensure compliance with qualification and appointment processes; understand terms of service and potential liabilities.
Insolvency and Bankruptcy Board of India (IBBI):
* Impact: Responsible for overseeing compliance and approving appointments/removals of Managing Directors.
* Action Required: Develop guidelines for MD selection and monitor agency compliance with the new regulations.
Stakeholders of the Insolvency Resolution Process:
* Impact: Indirectly affected by improved governance and oversight of Insolvency Professional Agencies.
* Action Required: No direct action required, but may benefit from increased confidence in the insolvency resolution process.
Key Entities Referenced
Insolvency and Bankruptcy Board of India: A regulatory body in India responsible for overseeing insolvency proceedings and regulating insolvency professionals.
Insolvency and Bankruptcy Code, 2016: A law in India that consolidates and amends the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals.
Insolvency Professional Agencies: Entities that are registered with the Insolvency and Bankruptcy Board of India to regulate insolvency professionals.
Insolvency and Bankruptcy Board of India Model ByeLaws and Governing Board of Insolvency Professional Agencies Amendment Regulations, 2018: Regulations by the Insolvency and Bankruptcy Board of India which amends existing regulations related to model byelaws and governing boards of insolvency professional agencies.
Governing Board: The board of directors responsible for the management and oversight of an insolvency professional agency.
Managing Director: The chief executive officer of an insolvency professional agency, responsible for its day-to-day operations.
New Delhi: The location where the notification was issued.
Dr. M. S. Sahoo: Chairperson of the Insolvency and Bankruptcy Board of India.
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EXTRAORDINARY
Hkkx III—[k.M 4
PART III—Section 4
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PUBLISHED BY AUTHORITY
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No. 383] NEW DELHI, THURSDAY, OCTOBER 11, 2018/ASVINA 19, 1940
भभभभााााररररततततीीीीयययय (cid:8)(cid:8)(cid:8)(cid:8)ददददववववााााललललाााा औऔऔऔरररर शशशशोोोोधधधधनननन अअअअ(cid:18)(cid:18)(cid:18)(cid:18)ममममतततताााा बबबबोोोोडडडड (cid:22)(cid:22)(cid:22)(cid:22)
अअअअििििधधधधससससचचूूचचूू ननननाााा
नई (cid:1)द(cid:3)ली, 11 अ(cid:7)ूबर, 2018
भभभभााााररररततततीीीीयययय (cid:8)(cid:8)(cid:8)(cid:8)ददददववववााााललललाााा औऔऔऔरररर शशशशोोोोधधधधनननन अअअअ(cid:18)(cid:18)(cid:18)(cid:18)ममममतततताााा बबबबोोोोडडडड (cid:22)(cid:22) (cid:22)(cid:22)((((आआआआददददशशशश (cid:22)(cid:22) (cid:22)(cid:22)उउउउपपपप----ििििववववििििधधधधययययाााा ंं ंंऔऔऔऔरररर (cid:8)(cid:8)(cid:8)(cid:8)ददददववववााााललललाााा (cid:28)(cid:28)(cid:28)(cid:28)ययययााााययययााााललललयययय एएएएजजजजिििि(cid:31)(cid:31)(cid:31)(cid:31)ससससयययय!!!! ककककाााा शशशशााााससससीीीी बबबबोोोोडडडड))(cid:22)(cid:22)))(cid:22)(cid:22) ((((ससससशशंंशशंं ोोोोधधधधनननन))))
ििििववववििििननननययययमममम,,,, 2222000011118888
सससस.ंंंं आआआआईईईई....बबबबीीीी....बबबबीीीी....आआआआईईईई..../2222000011118888----11119999/जजजजीीीी....एएएएनननन..../आआआआरररर....ईईईई....जजजजीीीी....000033335555.—भारतीय (cid:1)दवाला और शोधन अ(cid:13)मता बोड,(cid:18) (cid:1)दवाला
और शोधन अ(cid:13)मता संिहता, 2016 (2016 का 31) क(cid:20) धारा 240 के साथ प(cid:22)ठत धारा 196, धारा 203 और धारा 205
(cid:24)ारा (cid:25)द(cid:26) शि(cid:7)य(cid:30) का (cid:25)योग करते ए, भारतीय (cid:1)दवाला और शोधन अ(cid:13)मता बोड (cid:18) (आदश(cid:18) उप-िविधयां और (cid:1)दवाला
(यायालय एजि* सय(cid:30) का शासी बोड)(cid:18) िविनयम, 2016 का संशोधन करने के िलए िन-िलिखत िविनयम बनाता ह,ै अथात(cid:18) ्:—
1. (1) इन िविनयम(cid:30) का संि(cid:13)1 नाम भारतीय (cid:1)दवाला और शोधन अ(cid:13)मता बोड (cid:18)(आदश (cid:18)उप-िविधयां और (cid:1)दवाला
(यायालय एजि* सय(cid:30) का शासी बोड)(cid:18) (सशं ोधन) िविनयम, 2018 ह ै।
(2) ये राजप2 म* उनके (cid:25)काशन क(cid:20) तारीख को (cid:25)व(cid:26)ृ ह(cid:30)गे ।
2. भारतीय (cid:1)दवाला और शोधन अ(cid:13)मता बोड (cid:18) (आदश (cid:18) उप-िविधयां और (cid:1)दवाला (यायालय एज*िसय(cid:30) का शासी बोड)(cid:18)
िविनयम, 2016 (िज(ह * इसम * इसके प8ात् मलू िविनयम कहा गया ह)ै के िविनयम 2 के उप-िविनयम (1) के खंड (क) को
उसके खंड (कक) के ;प म * पनु स=>या(cid:1)ं कत (cid:1)कया जाएगा और इस (cid:25)कार पुनस=>या(cid:1)ं कत खडं (कक) स े पूव (cid:18) िन-िलिखत खंड
अंतः@थािपत (cid:1)कया जाएगा, अथा(cid:18)त:्—
‘(क) “बोड”(cid:18) स े (cid:1)दवाला और शोधन अ(cid:13)मता सिं हता, 2016 क(cid:20) धारा 188 के अधीन @थािपत भारतीय (cid:1)दवाला और
शोधन अ(cid:13)मता बोड(cid:18) अिभ(cid:25)ते ह;ै’ ।
3. मूल िविनयम(cid:30) के िविनयम 5 के @थान पर, िन-िलिखत िविनयम रखे जाएंगे, अथा(cid:18)त:्—
“5555.... शशशशााााससससीीीी बबबबोोोोडडडड (cid:22)(cid:22)(cid:22)(cid:22)कककक%%%% ससससररररंंंं चचचचननननाााा – (1) शासी बोड (cid:18)िन-िलिखत से िमलकर बनेगा—
5979 GI/2018 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC. 4]
(क) (cid:25)बंध िनदशे क;
(ख) @वतं2 िनदशे क; और
(ग) शेयरधारक िनदशे क
पर(त ुशासी बोड (cid:18)म *(यनू तम सात िनदशे क ह(cid:30)ग े।
(2) (cid:25)बंध िनदशे क को @वतं2 िनदशे क या शेयरधारक िनदशे क नहI समझा जाएगा ।
(3) (cid:1)कसी (cid:1)दवाला Mावसाियक एजस* ी के (cid:1)कसी कम(cid:18)चारी को उसके शासी बोड (cid:18) म* (cid:25)बंध िनदेशक के अित(cid:22)र(cid:7)
िनदशे क के ;प म *िनय(cid:7)ु (cid:1)कया जा सकेगा (cid:1)क(तु ऐसे िनदशे क को एक शेयरधारक िनदशे क को समझा जाएगा ।
(4) आध े स े अिधक िनदशे क अपनी िनयिु (cid:7) के समय और िनदशे क के ;प म* अपन े काय(cid:18)काल के दौरान सभी समय(cid:30)
पर भारत म *िनवासी Mि(cid:7) ह(cid:30)गे ।
(5) @वतं2 िनदशे क(cid:30) क(cid:20) सं>या शेयरधारक िनदशे क(cid:30) क(cid:20) सं>या स ेकम नहI होगी:
पर(त ु शासी बोड (cid:18) क(cid:20) कोई भी बैठक कम से कम एक @वतं2 िनदशे क क(cid:20) उपि@थित के िबना आयोिजत नहI क(cid:20)
जाएगी ।
(6) कोई @वतं2 िनदशे क ऐसा Mि(cid:7) होगा—
(क) जो (cid:1)क योSय और ईमानदार Mि(cid:7) ह;ै
(ख) िजसके पास िव(cid:26), िविध, (cid:25)बंधन या (cid:1)दवाला के (cid:13)े2 म* िवशेषUता ह;ै
(ग) जो एक (cid:1)दवाला Mावसाियक नहI ह;ै
(घ) जो शासी बोड (cid:18)के िनदशे क(cid:30) का नातदे ार नहI ह;ै
(ङ) िजसका (cid:1)दवाला Mावसाियक एज*सी या उसके (cid:1)कसी िनदशे क या उसक(cid:20) दस (cid:25)ितशत स े अिधक शेयर
पूंजी धा(cid:22)रत करन े वाल े (cid:1)कसी शेयरधारक के साथ ठीक पूवव(cid:18) तV दो िव(cid:26)ीय वषW के दौरान या चाल ू
िव(cid:26)ीय वष (cid:18)के दौरान कोई धनीय संबंध नहI था या रहा ह;ै
(च) जो (cid:1)दवाला Mावसाियक एज*सी का शेयरधारक नहI ह;ै
(छ) जो (cid:1)दवाला Mावसाियक एज*सी क(cid:20) दस (cid:25)ितशत स े अिधक शये र पूंजी धा(cid:22)रत करन े वाल े शये रधारक(cid:30)
के (cid:1)कसी िनदशे क बोड (cid:18)का सद@य नहI ह ै।
(7) @वतं2 िनदशे क, (cid:1)दवाला Mावसाियक एजस* ी (cid:24)ारा (cid:25)@तािवत नाम(cid:30) क(cid:20) सूची म *से बोड (cid:18)(cid:24)ारा नामिनदिY शत (cid:1)कया
जाएगा ।
(8) कोई Mि(cid:7) (cid:25)Zयके तीन वष(cid:18) या उसके भाग क(cid:20) अिधकतम दो काया(cid:18)विधय(cid:30) के िलए या स(cid:26)र वष(cid:18) क(cid:20) आयु तक,
इनम *से जो भी पूव(cid:18)तर हो, @वतं2 िनदशे क के ;प म* काय(cid:18) कर सकेगा ।
(9) उप-िविनयम (8) म* िन[द\(cid:18) दसू री काया(cid:18)विध शासी िनकाय (cid:24)ारा (cid:25)थम काया(cid:18)विध के सतं ोष(cid:25)द काय(cid:18)-िन]पादन के
पुन^वल(cid:18) ोकन के अ_यधीन हो सकेगा ।
(10) (cid:1)कसी @वतं2 िनदशे क के िलए उसी या एक अ(य (cid:1)दवाला Mावसाियक एजस* ी म *एक शेयरधारक िनदशे क बनन े
के िलए तीन वष (cid:18)क(cid:20) उपशमन अविध लागू होगी ।
(11) एक-चौथाई िनदशे क(cid:30) से अिधक (cid:1)दवाला Mावसाियक नहI ह(cid:30)गे ।
(12) िनदशे क, (cid:1)कसी @वतं2 िनदशे क का शासी बोड (cid:18)के अ_य(cid:13) के ;प म* चयन कर*गे ।
(13) ऐसा िनदशे क, िजसका शासी बोड (cid:18)या उसक(cid:20) (cid:1)कसी सिमित क(cid:20) (cid:1)कसी बैठक म *िवचाराथ (cid:18)(cid:25)@तुत (cid:1)कए जाने वाल े
(cid:1)कसी िवषय म* (cid:25)Zय(cid:13)तः या अ(cid:25)Zय(cid:13)तः कोई धनीय या अ(यथा िहत ह,ै सुसंगत प(cid:22)रि@थितय(cid:30) के उसक(cid:20) जानकारी म * आन े के
यथासभं व शी‘ ऐसी बैठक म * अपने िहत क(cid:20) (cid:25)कृित को (cid:25)कट करेगा और ऐसा (cid:25)कटन, यथाि@थित, शासी बोड (cid:18) या सिमित क(cid:20)¹Hkkx IIIµ[k.M 4º Hkkjr dk jkti=k % vlk/kj.k 3
काय(cid:18)वािहय(cid:30) म* अिभिलिखत (cid:1)कया जाएगा और वह िनदशे क उस िवषय क(cid:20) बाबत शासी बोड (cid:18) या सिमित के (cid:1)कसी िवचार-
िवमश(cid:18) या िविन8य म* भाग नहI लेगा ।
5555कककक.... ’’’’बबबबधधंंधधंं ििििननननददददेशेशेशेशकककक (1) (cid:25)Zयके (cid:1)दवाला Mावसाियक एज*सी, बोड (cid:18)(cid:24)ारा समय-समय पर जारी (cid:1)कए गए (cid:1)दशािनदशY (cid:30)
के अधीन रहते ए, (cid:25)बंध िनदशे क क(cid:20) अहत(cid:18) ा और अनभु व, िनयुि(cid:7) क(cid:20) रीित, िनयुि(cid:7) के िनबंधन और शतW और उसके चयन
और िनयुि(cid:7) स ेसहबb अ(य (cid:25)(cid:1)cयाZमक औपचा(cid:22)रकताd का इस शत(cid:18) के अधीन रहत े ए अवधारण करेगी (cid:1)क—
(क) (cid:1)कसी Mि(cid:7) का (cid:25)बंध िनदशे क के ;प म* चयन, कम स ेकम एक राfीय दिै नक समाचारप2 के सभी सं@करण(cid:30) म*
खुले िवUापन के मा_यम से (cid:1)कया जाएगा;
(ख) (cid:25)बंध िनदशे क के ;प म* पदभार gहण करत े समय (cid:1)कसी Mि(cid:7) क(cid:20) आयु पचपन वष (cid:18) स े अिधक नहI होगी, जो
(cid:1)क शासी बोड (cid:18)(cid:24)ारा उसके िलए कारण अिभिलिखत करने के प8ात् साठ वष (cid:18)तक िशिथल क(cid:20) जा सकेगी; और
(ग) कोई Mि(cid:7) पसh ठ वष(cid:18) क(cid:20) आयु (cid:25)ा1 करने के प8ात,् (cid:25)बंध िनदेशक के ;प म *काय (cid:18)नहI करेगा ।
(2) (cid:25)बंध िनदशे क के ;प म * (cid:1)कसी Mि(cid:7) क(cid:20) िनयिु (cid:7) कम से कम तीन वष (cid:18) और अिधकतम पांच वष(cid:18) के कायक(cid:18) ाल के
िलए होगी ।
(3) कोई Mि(cid:7) अिधकतम दो काया(cid:18)विधय(cid:30) के िलए (cid:25)बंध िनदशे क के ;प म *काय (cid:18)कर सकेगा ।
(4) (cid:1)कसी Mि(cid:7) क(cid:20) (cid:25)बंध िनदशे क के ;प म *दसू री काया(cid:18)विध के िलए िनयिु (cid:7) (cid:25)(cid:1)cया नए िसरे से क(cid:20) जाएगी ।
(5) (cid:25)बंध िनदशे क क(cid:20) िनयिु (cid:7) और उस े सदं ेय पा(cid:22)रiिमक का अनमु ोदन शासी बोड (cid:18) (cid:24)ारा ग(cid:22)ठत एक (cid:25)ितकर सिमित
(cid:24)ारा (cid:1)कया जाएगा ।
(6) (cid:25)बंध िनदशे क क(cid:20) िनयिु (cid:7), िनयुि(cid:7) का नवीकरण और उसक(cid:20) सेवाd का पयव(cid:18) सान बोड (cid:18) के पूव(cid:18) अनुमोदन के
अ_यधीन होगा ।
(7) (cid:25)बंध िनदशे क, शासी बोड (cid:18)या बोड (cid:18)(cid:24)ारा जारी (cid:1)कए गए िनदेश(cid:30), (cid:1)दशािनदशY (cid:30) और अ(य आदेश(cid:30) या िनयम(cid:30), संगम
अनुjछेद(cid:30), (cid:1)दवाला Mावसाियक एज*सी क(cid:20) उप-िविधय(cid:30) को (cid:25)भावी करन े म * असफल होन े पर या अवचार अथवा पद पर बने
रहन े क(cid:20) अ(cid:13)मता के आधार पर शासी बोड (cid:18) (cid:24)ारा बोड (cid:18) के पवू (cid:18) अनुमोदन स े सेवा से हटाए जाने या सेवा-समाि1 के िलए दायी
होगा ।
(8) बोड,(cid:18) @व(cid:25)ेरणा, स े (cid:25)बंध िनदशे क को, (cid:1)दवाला समाधान (cid:25)(cid:1)cया के िहतधारक(cid:30) के िहत म* या लोक िहत म*, सुन े
जान ेका युि(cid:7)यु(cid:7) अवसर (cid:1)दए जाने के प8ात्, य(cid:1)द उपयु(cid:7) समझे, हटा सकेगा या उसक(cid:20) िनयुि(cid:7) का पय(cid:18)वसान कर सकेगा ।
(9) (cid:25)बंध िनदशे क, सद@यता सिमित, मािनटnरंग सिमित, िशकायत िनवारण सिमित और अनुशासिनक सिमित का
पदने सद@य होगा ।
5555खखखख.... अअअअननननपपुुपपुु ााााललललनननन—भारतीय (cid:1)दवाला और शोधन अ(cid:13)मता बोड (cid:18) (आदश(cid:18) उप-िविधयां और (cid:1)दवाला (यायालय एज*िसय(cid:30)
का शासी बोड)(cid:18) (सशं ोधन) िविनयम, 2018 के (cid:25)ारंभ क(cid:20) तारीख को रिज@oीकृत (cid:25)Zयके (cid:1)दवाला Mावसाियक एज*सी, ऐस े
(cid:25)ारंभ क(cid:20) तारीख स ेएक वष (cid:18)के भीतर िविनयम 5 और उप-िविनयम 5क का अनुपालन करेगी ।” ।
डॉ. एम. एस. साp, अ_य(cid:13)
[िवUापन-III/4/असा./307/18]
))))टटटट++++पपपपणणणण:::: भारतीय (cid:1)दवाला और शोधन अ(cid:13)मता बोड (cid:18) (आदश(cid:18) उप-िविधयां और (cid:1)दवाला (यायालय एजि* सय(cid:30) का शासी बोड)(cid:18)
िविनयम, 2016, भारत के राजप2, असाधारण, भाग III, खंड 4, सं. 421, तारीख 21 नवrबर, 2016 म *
अिधसूचना सं. आई.बी.बी.आई.////2016-17////जी.एन.////आर.ई.जी.001,तारीख 21 नवrबर, 2016 (cid:24)ारा (cid:25)कािशत (cid:1)कए
गए थे और इनम *अब तक कोई संशोधन नहI (cid:1)कया गया ह ै।4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC. 4]
INSOLVENCY AND BANKRUPTCY BOARD OF INDIA
NOTIFICATION
New Delhi, the 11th October, 2018
INSOLVENCY AND BANKRUPTCY BOARD OF INDIA (MODEL BYE-LAWS AND
GOVERNING BOARD OF INSOLVENCY PROFESSIONAL AGENCIES) (AMENDMENT)
REGULATIONS, 2018
No. IBBI/2018-19/GN/REG35.—In exercise of the powers conferred by sections 196, 203 and 205
read with section 240 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), the Insolvency and
Bankruptcy Board of India hereby makes the following regulations to amend the Insolvency and Bankruptcy
Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations,
2016 namely:—
1. (1) These regulations may be called the Insolvency and Bankruptcy Board of India (Model Bye-Laws and
Governing Board of Insolvency Professional Agencies) (Amendment) Regulations, 2018.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency
Professional Agencies) Regulations, 2016, in regulation 2, in sub-regulation (1), clause (a) shall be
renumbered as clause (aa) thereof and before clause (aa) as so renumbered, the following clause shall be
inserted, namely: —
‘(a) “Board” means the Insolvency and Bankruptcy Board of India established under section 188 of the
Code;’.
3. In the principal regulations, for regulation 5, the following regulations shall be substituted, namely: —
“5. Composition of the Governing Board. — (1) The Governing Board shall consist of—
(a) managing director;
(b) independent directors; and
(c) shareholder directors:
Provided that the Governing Board shall have minimum seven directors.
(2) The managing director shall not be considered either an independent director or a shareholder
director.
(3) Any employee of an insolvency professional agency may be appointed as a director on its Governing
Board in addition to the managing director, but such director shall be deemed to be a shareholder
director.
(4) More than half of the directors shall be persons resident in India at the time of their appointment, and
at all times during their tenure as directors.
(5) The number of independent directors shall not be less than the number of shareholder directors:
Provided that no meeting of the Governing Board shall be held without the presence of at least
one independent director.
(6) An independent director shall be an individual—
(a) who is a person of ability and integrity;
(b) who has expertise in the field of finance, law, management or insolvency;
(c) who is not an insolvency professional;
(d) who is not a relative of the directors of the Governing Board;¹Hkkx IIIµ[k.M 4º Hkkjr dk jkti=k % vlk/kj.k 5
(e) who had or has no pecuniary relationship with the insolvency professional agency, or any of its
directors, or any of its shareholders holding more than ten per cent. of its share capital, during the
immediately preceding two financial years or during the current financial year;
(f) who is not a shareholder of the insolvency professional agency;
(g) who is not a member of the Board of Directors of any of the shareholders holding more than ten
per cent. of the share capital of the insolvency professional agency.
(7) An independent director shall be nominated by the Board from amongst the list of names proposed by
the insolvency professional agency.
(8) An individual may serve as an independent director for a maximum of two terms of three years each
or part thereof, or up to the age of seventy years, whichever is earlier.
(9) The second term referred to in sub-regulation (8) may be subject to a satisfactory performance review
of the first term by the Governing Board.
(10) A cooling off period of three years shall be applicable for an independent director to become a
shareholder director in the same or another insolvency professional agency.
(11) Not more than one fourth of the directors shall be insolvency professionals.
(12) The directors shall elect an independent director as the Chairperson of the Governing Board.
(13) A director, who has, any interest, direct or indirect, pecuniary or otherwise, in any matter coming up
for consideration at a meeting of the Governing Board or any of its Committees, shall as soon as
possible after relevant circumstances have come to his knowledge, disclose the nature of his interest at
such meeting and such disclosure shall be recorded in the proceedings of the Governing Board or the
Committee, as the case may be, and the director shall not take part in any deliberation or
decision of the Governing Board or the Committee with respect to that matter.
5A. Managing director. — (1) An insolvency professional agency shall, subject to the guidelines issued
by the Board from time to time, determine the qualification and experience, manner of appointment, terms and
conditions of appointment and other procedural formalities associated with the selection and appointment of
the managing director, subject to the condition that—
(a) an individual shall be selected as managing director through an open advertisement in all editions
of at least one national daily newspaper;
(b) an individual at the time joining as managing director shall not be above the age of fifty-five years,
which may be relaxed by the Governing Board up to sixty years, after recording reasons therefor;
and
(c) an individual shall not serve as managing director after he attains the age of sixty-five years.
(2) The appointment of an individual as the managing director shall be for a tenure of not less than three years
but not exceeding five years.
(3) An individual may serve as managing director for a maximum of two terms.
(4) The process of appointment for the second term of an individual as managing director shall be conducted
afresh.
(5) The appointment and remuneration payable to the managing director shall be approved by a compensation
committee constituted by the Governing Board.
(6) The appointment, renewal of appointment and termination of service of the managing director shall be
subject to prior approval of the Board.6 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC. 4]
(7) The managing director shall be liable for removal or termination of services by the Governing Board, with
the prior approval of the Board, for failure to give effect to the directions, guidelines and other orders issued
by the Governing Board or the Board, or the rules, the articles of association or bye-laws of the insolvency
professional agency or on the ground of misconduct or incapacity to continue in office.
(8) The Board may suo motu remove or terminate the services of the managing director, if it deems fit, in the
interest of stakeholders of the insolvency resolution process or in the public interest, after giving a reasonable
opportunity of being heard.
(9) The managing director shall be an ex-officio member of Membership Committee, Monitoring Committee,
Grievance Redressal Committee and Disciplinary Committee.
5B. Compliance. —Every insolvency professional agency registered as on the date of commencement of the
Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency
Professional Agencies) (Amendment) Regulations, 2018, shall comply with regulations 5 and 5A within one
year from the date of such commencement.”.
Dr. M. S. SAHOO, Chairperson
[ADVT.-III/4/Exty./307/18]
Note: The Insolvency and Bankruptcy Board of India (Model Bye–Laws and Governing Board of Insolvency
Professional Agencies) (Amendment) Regulations, 2016 were published vide notification No. IBBI/2016-
17/GN/REG001 on 22nd November, 2016 in the Gazette of India, Extraordinary, Part III, Section 4, No. 421
dated 21st November, 2016 and these have not been amended so far.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.