IBBI and Insolvency Professional Agencies
IBBI registers and disciplines. The IPA admits, monitors and authorises. Know which body acts at each step.
Part IV of the Insolvency and Bankruptcy Code (sections 188 to 223) builds the regulatory layer that sits under every insolvency process. At the top is the Insolvency and Bankruptcy Board of India (IBBI). Below it are insolvency professional agencies (IPAs), which enrol and police insolvency professionals as front-line regulators. At the base are the insolvency professionals (IPs) who actually run the processes.
The structure is two-tier on purpose. IBBI registers and disciplines; the IPA admits members, sets their conduct rules through bye-laws and watches their day-to-day work. Case studies test whether you can tell which body acts at each point.
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Who Does What
IBBI
Legal basis
Established under section 188; constituted under section 189; functions in section 196
Main functions
Registers IPAs, IPs and information utilities and can renew, suspend or cancel them; makes regulations; inspects and investigates; runs the disciplinary committee
Insolvency professional agency
Legal basis
Sections 199-205; IPA Regulations
Main functions
Grants membership, lays down conduct standards for members, monitors them, suspends or cancels membership under its bye-laws, redresses consumer grievances (section 204)
Insolvency professional
Legal basis
Sections 206-208
Main functions
Acts as IRP, RP, liquidator or bankruptcy trustee; must be enrolled with an IPA and registered with IBBI (section 206)
| Body | Legal basis | Main functions |
|---|---|---|
| IBBI | Established under section 188; constituted under section 189; functions in section 196 | Registers IPAs, IPs and information utilities and can renew, suspend or cancel them; makes regulations; inspects and investigates; runs the disciplinary committee |
| Insolvency professional agency | Sections 199-205; IPA Regulations | Grants membership, lays down conduct standards for members, monitors them, suspends or cancels membership under its bye-laws, redresses consumer grievances (section 204) |
| Insolvency professional | Sections 206-208 | Acts as IRP, RP, liquidator or bankruptcy trustee; must be enrolled with an IPA and registered with IBBI (section 206) |
IBBI and the IPAs: The Numbers
- IBBI composition (section 189)
- A Chairperson; three ex officio members, officers not below Joint Secretary, one each from the Ministries of Finance, Corporate Affairs and Law; one ex officio member nominated by the RBI; and five other members nominated by the Central Government, of whom at least three are whole-time. Ten in all.
- Term
- Five years or until age 65, whichever is earlier, for the Chairperson and non ex officio members, with reappointment allowed (section 189(4)).
- The three IPAs
- Indian Institute of Insolvency Professionals of ICAI, ICSI Institute of Insolvency Professionals, and the Insolvency Professional Agency of the Institute of Cost Accountants of India. They are the only IPAs on IBBI's register.
- IPA eligibility (IPA Regulations, reg 3)
- A section 8 company whose sole object is IPA work, with net worth of at least ₹10 crore and paid-up capital of ₹5 crore, not controlled by persons resident outside India, with no more than 49% of share capital held by them. The certificate of registration is valid for five years.
- Bye-laws (section 205)
- Each IPA makes bye-laws consistent with IBBI's model bye-laws, with IBBI's approval. The model bye-laws are where the authorisation for assignment rules sit.
How Discipline Works After the 2026 Amendment
Sections 217-220 were rewritten by the IBC (Amendment) Act, 2026 with effect from 26 May 2026. They now speak of "service providers", a new defined term (section 3(31A)) covering IPs, IPAs, information utilities, registered valuers and notified others.
- 1
1. Complaint or suo motu inquiry
Anyone aggrieved may complain to IBBI (section 217), or IBBI may act on reasonable grounds and order an inspection or investigation (section 218).
- 2
2. Show cause notice
Section 219 now lets IBBI issue a show cause notice after an inspection or investigation or on the basis of material already on record.
- 3
3. Disciplinary committee
Constituted from the Chairperson, whole-time members or officers not below Executive Director (section 220(1)). Before 26 May 2026 it was whole-time members only.
- 4
4. Orders
Penalty up to three times the loss caused or unlawful gain made, whichever is higher; where neither can be quantified, up to ₹2 crore (was ₹1 crore). It may also suspend or cancel registration or order disgorgement.
- 5
5. Appeal
To the NCLAT within 30 days, extendable by 15 days (new section 220(7)-(8)). Separately, an IPA or information utility refused registration appeals to the NCLAT under section 202 or 211.
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Exam Cut-Off Versus Current Law
The Limited Insolvency Examination tests the law as on 4 February 2025. For exam answers, use the pre-2026 sections: the disciplinary committee is whole-time members only, the unquantifiable-loss cap is ₹1 crore, and the Code says "insolvency professional agency, insolvency professional or information utility" rather than "service provider". The 2026 changes also added section 196(1)(sa), letting IBBI set standards of conduct and decision timelines for committees of creditors.
How the Limited Insolvency Examination Tests This
Expect one-mark questions on composition (who nominates the RBI member, how many whole-time members at minimum) and on which body grants what: membership comes from the IPA, registration from IBBI, and the authorisation for assignment from the IPA again. The common trap is crediting IBBI with an act the Code gives to the IPA, or the reverse.
In a case study, the scenario usually involves a complaint against an IP. Track the route: IPA monitoring and its own disciplinary process under the bye-laws, IBBI's inspection and show cause notice, then the disciplinary committee's order.
FAQs
What is the role of IBBI under the IBC?expand_more
IBBI registers and regulates insolvency professionals, insolvency professional agencies and information utilities, writes the regulations that govern every process under the Code, and inspects, investigates and disciplines those it registers (section 196).
How many insolvency professional agencies are there in India?expand_more
Three are registered with IBBI: IIIP of ICAI, ICSI Institute of Insolvency Professionals and the IPA of the Institute of Cost Accountants of India.
Does an insolvency professional register with IBBI or with the IPA?expand_more
Both. Section 206 requires enrolment as a member of an IPA and registration with IBBI. The application for registration is made through the IPA.
Can an IBBI disciplinary order against an IP be appealed?expand_more
Since 26 May 2026, yes: section 220(7) allows an appeal to the NCLAT within 30 days, plus up to 15 more for sufficient cause. The provision did not exist at the exam's law cut-off.
Next steps
- AFAarrow_forward
- IP Code of Conductarrow_forward
- Information Utilitiesarrow_forward
- Become an IParrow_forward
65 questions, case-study format, negative marking.