The Insolvency and Bankruptcy Code, 2016, has been introduced with the primary intention of improving India’s ranking in the ease of doing business index, increasing lender’s confidence and facilitating expansion of the credit market in India.
As the Code is largely executed through insolvency professionals, its success hinges on their skills and competence. Insolvency professionals (IPs) are licensed professionals authorised by insolvency professional agencies (IPAs) and the Insolvency and Bankruptcy Board of India (Board) which take up the roles of interim resolution professional/ resolution professional/liquidator/bankruptcy trustee in insolvency resolution and liquidation/bankruptcy process of different entities (as the case may be) as have been envisaged under the Code.
Considering the powers and duties conferred on insolvency professionals under the Code, it is clear that the entire insolvency resolution process revolves around them.
With the primary intent of producing quality IPs, the Code, through the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 (IP Regulations), has prescribed qualifying examinations for insolvency professionals i.e., insolvency professional examinations. In this article, I am going to throw light and elucidate on all that one needs to know about insolvency professional examinations.
What are Insolvency Professional Examinations?
Regulation 3 of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016, deals with insolvency professional examinations. The said Regulation 3 has been reproduced as under:
(2) The Board shall, either on its own or through a designated agency, conduct a ‘Limited Insolvency Examination’ to test the knowledge and application of knowledge of individuals in the areas of insolvency, bankruptcy and allied subjects.
(3) The syllabus, format and frequency of the ‘Limited Insolvency Examination’, including qualifying marks, shall be published on the website of the Board at least one month before the examination.
Regulation 3 enables the Board to conduct on its own or through a designated agency two qualifying examinations for insolvency professionals i.e. Limited Insolvency Examination (LIE) and National Insolvency Examination (NIE).
Further Regulation 5 of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016, states passing the LIE/NIE as one of the criteria for being registered as an insolvency professional. The said Regulation 5 has been reproduced as under:
(a) has passed the National Insolvency Examination;
(b) has passed the Limited Insolvency Examination, and has 15 years of experience in management, after he received a Bachelor’s degree from a university established or recognised by law; or
(c) has passed the Limited Insolvency Examination and has 10 years of experience as -
(i) a chartered accountant enrolled as a member of the Institute of Chartered Accountants of India,
(ii) a company secretary enrolled as a member of the Institute of Company Secretaries of India,
(iii) a cost accountant enrolled as a member of the Institute of Cost Accountants of India, or
(iv) an advocate enrolled with a Bar Council.
Hence in order to be eligible for registration as an Insolvency Professional, an applicant has to fulfill the following criteria:
Further, the Ministry of Corporate Affairs vide press release dated 23rd November 2016, stated that the following categories of individuals are eligible for registration as insolvency professionals:-
At the outset, it can be deduced that a work experience requirement has been specified for applicants appearing for the LIE, and not for applicants appearing for the NIE.
On 30th November 2016, the Board notified the syllabus for the LIE.
As far as the NIE is concerned, the examination has not been notified as of date. However, as per the press release made by the Ministry of Corporate Affairs on 23rd November 2016, the details of the NIE will be specified through regulations.
Syllabus of the Limited Insolvency Examination
Format of Limited Insolvency Examination
Frequency of Limited Insolvency Examination
The Board has also released a set of frequently asked questions in relation to the Limited Insolvency Examination. Those are available here.
Pranav Khatavkar is a Mumbai-based advocate, who has penned a commentary on the Insolvency and Bankruptcy Code, 2016. In continuation of his mission of developing India’s re-written bankruptcy framework, Pranav recently wrote a book titled Guide to Insolvency Professional Examination that aids and assists candidates to appear for the insolvency professional examination.
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