On 19th May 2026, the Insolvency and Bankruptcy Board of India issued two companion notifications that quietly but meaningfully ease the burden on small businesses navigating insolvency.
India's insolvency framework has long grappled with a fundamental tension: the Insolvency and Bankruptcy Code (IBC) was designed for large corporate debtors, but a significant share of cases involve Micro, Small and Medium Enterprises (MSMEs) with limited assets and thinner margins. Two new amendments, notified simultaneously by IBBI Chairperson Ravi Mital, take a targeted step toward resolving that tension.
"For MSMEs classified under section 7 of the MSME Development Act, 2006, one registered valuer per asset class shall suffice — unless the relevant committee decides, for reasons to be recorded in writing, to appoint two."
This single proviso, inserted in parallel into two separate regulations, captures the spirit of both amendments. Here is what changed, and why it matters.
The Two Amendments at a Glance
Both notifications were issued on the same date under the authority of sections 196 and 240 of the Insolvency and Bankruptcy Code, 2016, and came into force immediately upon publication in the Official Gazette.
Amendment 1 — CIRP Insolvency Resolution Process for Corporate Persons (Second Amendment) Regulations, 2026 F. No. IBBI/2026-27/GN/REG141
Inserts a new proviso in Regulation 27. The Resolution Professional handling an MSME's CIRP now appoints one set of registered valuers per asset class, not two — unless the Committee of Creditors (CoC) directs otherwise in writing.
Amendment 2 — Liquidation Liquidation Process (Third Amendment) Regulations, 2026 F. No. IBBI/2026-27/GN/REG142
Inserts a parallel proviso in Regulation 35. The Liquidator managing an MSME's liquidation appoints one registered valuer per asset class, unless the Consultation Committee decides to require two.
Why This Change Matters
Under the existing framework, two sets of registered valuers were mandated to independently value each asset class of the corporate debtor — a check meant to ensure accuracy and prevent manipulation. For large companies with significant assets, the cost and time involved in appointing two separate valuers is justified. For an MSME with limited assets, however, the same requirement often imposed a disproportionate financial and procedural burden on an already strained estate.
The amendments address this directly by making a single valuer the default for MSMEs, while preserving the committee's discretion to require two where warranted.
✅ Reduces valuation costs in CIRP and liquidation for MSME debtors ✅ Speeds up the resolution and liquidation timeline ✅ Eases the burden on Resolution Professionals and Liquidators ✅ Retains oversight — committees can still require two valuers with recorded reasons
Reading the Signal
The fact that both amendments were notified on the same date, covering both the resolution and the liquidation process, is deliberate. IBBI is signalling a coherent, cross-stage policy stance: MSMEs should face a proportionate insolvency regime — one that maintains safeguards but removes unnecessary friction at every stage of the process.
This is consistent with the broader legislative direction in recent years, which has sought to make the IBC more accessible and less costly for smaller enterprises, including through the pre-packaged insolvency framework introduced in 2021.
Key Takeaway for Practitioners
For insolvency professionals, resolution professionals, liquidators, and legal practitioners advising MSME clients, these amendments require an immediate update to standard operating procedures. The default valuation approach for MSME debtors has changed — and any deviation from the single-valuer norm now requires formal committee approval with written reasons on record.
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