The Insolvency and Bankruptcy Board of India through circular dated 28th July, 2021 has issued standard and uniform limits for monetary penalties to be imposed by an Insolvency Professional Agencies. The Disciplinary Committee of an Insolvency Professional Agency (IPA) may impose monetary penalty on its professional members as per the IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016.
The IPAs are directed to amend its Bye- Laws to incorporate Clause 24(5) of the Schedule to the IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016 as inserted by IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) (Third Amendment) Regulations, 2021. The circular enlists offences for which monetary penalty can be imposed by IPAs and lays down minimum and maximum penalties.
The circular intends to ensure that the IP agencies will have the flexibility to impose a graduated system of penalties, where minor non-compliances will result in monetary fines, and major violations will result in expulsion from the agency.
