IBBI | Insolvency Resolution Process for Corporate Persons (Fourth Amendment) Regulations, 2026

 📢 IBBI | Insolvency Resolution Process for Corporate Persons (Fourth Amendment) Regulations, 2026 Notified: 8th June 2026 | Effective: Date of Gazette Publication

IBBI has notified the CIRP (Fourth Amendment) Regulations, 2026, introducing three significant changes to strengthen transparency, creditor representation, and cost governance during insolvency proceedings.

---

🔑 Key Amendments at a Glance

1️⃣ Broader Operational Creditor Representation in CoC (Regulation 16) ➡ After "eighteen largest," the word "unrelated" is now inserted ➡ If unrelated operational creditors are fewer than 18, all such creditors must be included as observers in CoC meetings (without voting rights) ➡ The 3 largest statutory due authorities also get a seat as observers

2️⃣ New Regulation 16E — Assistance to CoC Where Non-Bank/PFI Creditors Hold >66% Voting Share ➡ Where creditors other than scheduled banks or public financial institutions hold more than 66% voting share in the CoC: → The Resolution Professional shall invite the 5 largest unrelated operational creditors (including top 3 statutory due authorities) as observers (no voting rights) → Their observations must be recorded in the minutes of CoC meetings

3️⃣ Revamped Regulation 31B — Committee Approval for CIRP Costs ➡ All CIRP costs incurred before the first CoC meeting must be placed before the committee with justification for ratification ➡ RP must prepare a Going Concern Assessment Report covering: → Estimated income, expenditure & cash flows → Working capital requirements → Value erosion risks from continuation/suspension of operations ➡ After the first CoC meeting, all future CIRP costs need prior CoC approval ➡ At each subsequent meeting, RP must: → Present income/expense/cash flow estimates till next meeting → Seek advance approval for proposed costs → Compare actual vs. previously approved costs

4️⃣ Amendment to Regulation 39 — Enhanced CoC Deliberation Standards ➡ CoC must now record its deliberations and rationale on: → Feasibility and viability of each resolution plan → Expected realisable value vs. fair value and liquidation value (Reg 35) → Adequacy of market discovery during CIRP, including use of challenge mechanism or re-invitation of plans

---

💡 Why This Matters These amendments address longstanding concerns around: ✅ Exclusion of operational creditors from meaningful CIRP participation ✅ Unchecked CIRP costs depleting the corporate debtor's estate ✅ Lack of documented rationale in CoC resolution plan approvals — a recurring ground for NCLAT/SC challenges

A welcome step toward process rigour and creditor inclusivity in Indian insolvency.

---

📌 F. No. IBBI/2026-27/GN/REG153 | Gazette Notification No. 385, dated 9th June 2026