IBBI Proposes Tighter CoC Oversight, Cost Controls and Procedural Clarity Under CIRP Regulations

The Insolvency and Bankruptcy Board of India has released a discussion paper dated 16 February 2026 proposing significant refinements to the Corporate Insolvency Resolution Process (CIRP) Regulations, 2016, aimed at strengthening creditor oversight, improving procedural discipline and reinforcing value maximisation under the Insolvency and Bankruptcy Code, 2016.

A key proposal seeks to standardise the recording of Committee of Creditors (CoC) deliberations while approving resolution plans. Beyond feasibility and viability, CoCs would now document expected recoveries vis-à-vis fair and liquidation values, adequacy of market discovery processes, and the credibility and funding certainty of resolution applicants. The move is intended to enhance transparency without diluting the CoC’s commercial wisdom.

The Board has also proposed a structured framework for approval of CIRP costs and decisions on running the corporate debtor as a going concern. Insolvency professionals may incur limited costs during the initial pre-CoC phase, subject to post-facto approval, while a mandatory Going Concern Assessment Report would guide early commercial decisions on operational continuation.

Further, the paper clarifies that all acceptable delayed claims must be placed before the Adjudicating Authority for condonation and adjudication, with the CoC’s role confined to recommendations on treatment within resolution plans.

Finally, to prevent conflicts of interest, IBBI has proposed excluding related operational creditors from CoCs constituted exclusively of operational creditors.

Public comments have been invited until 10 March 2026, signalling another calibrated step in tightening India’s insolvency framework.