The Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 2025 (“Second Amendment”), were notified on November 20, 2025, by notification bearing F. No. IBBI/2025-26/GN/REG132. By way of the Second Amendment, the Insolvency and Bankruptcy Board of India (“IBBI”) has made the below regulations to further amend the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 (“IP Regulations”).

1. Introduction of regulation 7B to limit the number of assignments for an insolvency professional.

“7B. An insolvency professional who is not an insolvency professional entity, shall not at any point of time, have more than ten assignments in aggregate as interim resolution professional and resolution professional in a corporate insolvency resolution process and as a liquidator in a liquidation process, of which not more than three assignments shall have admitted claims exceeding one thousand crore rupees each:

Provided that an insolvency professional who is not an insolvency professional entity, already holding more such assignments than the limit specified in this regulation on the date of commencement of Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 2025, shall not accept any such new assignment until the number of his ongoing assignments falls below the limit specified in this regulation.”

2. Omission of clarification to clause 22 of the Code of Conduct specified in First Schedule to IP Regulations (“Code of Conduct”) which read as “An insolvency professional may, at any point of time, not have more than ten assignments as resolution professional in corporate insolvency resolution process, of which not more than three shall have admitted claims exceeding one thousand crore rupees each”.

Clause 22 of Code of Conduct introduced in July 2021 imposed restrictions of ten assignments as resolution professional in corporate insolvency resolution process (CIRP), of which not more than three shall have admitted claims exceeding Rs. 1000 crore (Rupees thousand crore) each.

By way of introduction of regulation 7B to IP Regulations, the existing ceiling of ten assignments in the capacity of resolution professional is expanded to include assignments undertaken in the capacity of interim resolution professional and liquidator. Within this overall limit, no more than three assignments may relate to cases where admitted claims exceed Rs. 1000 crore each.

Insolvency professionals who, as of the effective date of the Second Amendment (i.e., November 20, 2025) possess assignments that surpass these stipulated limits are barred from accepting any additional appointments until their active assignments are reduced to comply with the mandated threshold. 

*Note: The Second Amendment does not prescribe any cap on the number of assignments undertaken through an Insolvency Professional Entity. No limit has yet been prescribed in respect of insolvency and bankruptcy of personal guarantors and the same may be considered at a later stage by IBBI.

The discussion paper on review of limit on number of assignments by insolvency professionals dated August 12, 2025, issued by the IBBI sought to examine and address the concerns relating to delays in insolvency and liquidation processes, and the concentration of assignments among a few insolvency professionals. The role of an insolvency professional under the Insolvency and Bankruptcy Code, 2016 (“Code”) is extensive and crucial requiring substantial time, attention, and professional judgment. Given the time bound processes under the Code, the effective and timely discharge of responsibilities by insolvency professionals assumes paramount importance. The paper notes that delays and concentration of work in the insolvency system result from a small group of insolvency professionals handling disproportionately large numbers of assignments – sometimes up to 25 (twenty-five), raising concerns about the quality of resolution, inclusiveness, and equitable opportunities for new professionals. Although the Code of Conduct previously limited the assignments by a resolution professional, the absence of similar limits on roles such as interim resolution professional and liquidator created imbalance, overburdening certain insolvency professionals and limiting opportunities for others.

In this background, the recommendation of extension of the ten-assignment cap to interim resolution professional and liquidator roles as well, limiting high-value assignments to three, and preventing insolvency professional already at or above the limit from taking further assignments until their caseload reduces was with the aim is to ensure quality, equitable distribution of work, time-bound resolution and integrity of the insolvency ecosystem.

3. Amendment to clause 6 of Code of Conduct.

“(Amended) 6. In cases where the insolvency professional is dealing with assets of a debtor during liquidation or bankruptcy process, he must ensure that he or his relatives do not knowingly acquire any such assets, whether directly or indirectly unless it is shown that there was no impairment of objectivity, independence or impartiality in the liquidation or bankruptcy process and the prior approval of the of the Adjudicating Authority has been obtained in the matter.”

The words “the approval of the Board” stands substituted by “the prior approval of the Adjudicating Authority”.

While the IBBI had issued a discussion paper dated August 12, 2025, proposing deletion of clause 6 from the Code of Conduct, by way of Second Amendment it has only amended the clause to substitute requirement of approval for such sale of assets from the Board of the debtor to the Adjudicating Authority.

However, the said substitution aligns with the approval requirements for mode of sale provided for under the IBBI (Liquidation Process) Regulations, 2016 (“Liquidation Process Regulations”) and IBBI (Bankruptcy Process for Personal Guarantors) Regulations, 2018 (“Bankruptcy Process Regulations”).

The discussion paper on deletion of clause 6 from the Code of Conduct, dated August 12, 2025, issued by the IBBI, explains that clause 6 of the Code of Conduct duplicates prohibitions (regarding mode of sale) already comprehensively contained in the Liquidation Process Regulations (proviso to regulation 33 (2)) and the Bankruptcy Process Regulations (regulation 27 (3)), both of which bar insolvency professionals or their relatives from acquiring assets of the debtor during liquidation / bankruptcy. It argues that retaining clause 6 leads to redundancy, risk of interpretational inconsistencies, and imposes unnecessary complexity. The proposed deletion is intended to consolidate all process-related prohibitions within the operative regulations themselves, improve clarity, promote harmonization, and align ethical requirements with the statutory framework, ensuring that independence and impartiality continue to be protected without duplicative provisions.

Please find attached the copy of the Discussion papers and the Amendment.

This update has been contributed by Bhavya Mohan (Partner) and Anjali Kutiyal (Associate).

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