IBBI Strengthens CIRP Rules on Creditor Participation and CoC Cost Approval

Notification F. No. IBBI/2026-27/GN/REG153 dated: 08.06.2026

The Insolvency and Bankruptcy Board of India (IBBI) has introduced significant amendments to the Corporate Insolvency Resolution Process (CIRP) Regulations to improve transparency, accountability, and stakeholder participation in insolvency proceedings.

The amendments enhance the role of operational creditors, strengthen oversight of CIRP costs and introduce additional disclosure and reporting requirements for the Committee of Creditors (CoC) and Resolution Professionals (RPs).

1. Greater Representation for Operational Creditors

The amended regulations provide for the constitution of a committee representing operational creditors.

The committee shall comprise:

• The 18 largest unrelated operational creditors, or
• All operational creditors with fewer than 18.

This measure seeks to improve operational creditors’ participation in the resolution process.

2. Observer Status for Operational Creditors in CoC Meetings

Where creditors other than scheduled banks or public financial institutions hold more than 66% voting share in the Committee of Creditors, certain operational creditors may attend CoC meetings as observers.

The observer category shall include:

• The five largest unrelated operational creditors, and
• Key statutory authorities, where applicable.

Such participants may attend meetings but will not possess voting rights.

3. Prior CoC Approval Mandatory for CIRP Costs

To strengthen financial discipline, the amendments require the Resolution Professional (RP) to obtain prior approval of the Committee of Creditors for:

• Insolvency Resolution Process Costs incurred after the first CoC meeting.

The requirement is intended to improve oversight and accountability regarding CIRP expenditure.

4. Going Concern Assessment Report Introduced

The amendments require the Resolution Professional to prepare a:

Going Concern Assessment Report

The report is expected to assess the corporate debtor’s ability to continue operations and assist stakeholders in evaluating resolution prospects.

5. Enhanced Disclosure by Committee of Creditors

The Committee of Creditors is now required to record the rationale underlying its decisions regarding resolution plans.

The CoC must specifically document its assessment of:

5.1. Feasibility and Viability of Resolution Plans

The reasons supporting its conclusion regarding the feasibility and viability of the selected resolution plan.

5.2. Expected Value Realisation

The expected value realisation for creditors under the approved resolution plan.

5.3. Market Discovery Measures

The adequacy of market discovery efforts undertaken during the resolution process, including steps taken to maximise participation and value.

6. Objective of the Amendments

The amendments seek to strengthen governance and decision-making within the insolvency framework by:

• Enhancing participation of operational creditors;
• Improving transparency in CoC deliberations;
• Strengthening control over CIRP costs;
• Increasing accountability of Resolution Professionals; and
• Promoting informed and well-documented resolution outcomes.

The revised framework is expected to improve stakeholder confidence and contribute to more transparent and efficient insolvency resolution proceedings under the Insolvency and Bankruptcy Code, 2016.

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