Soon, more universities will offer graduate courses in bankruptcy resolution

New Delhi: As India witnesses a shortage of skilled professionals who can rescue financially distressed companies, the bankruptcy board has asked leading institutions to introduce postgraduate courses in insolvency resolution.

Armed with a two-year degree, a graduate in select disciplines such as accounting, law, finance and economics can become a bankruptcy resolution professional without waiting for the decade-long experience typically required, according to the Insolvency and Bankruptcy Board of India (IBBI).

The bankruptcy rule-maker has invited institutions with “quality residential facilities to accommodate at least 100 students at a time” and a “reasonably large campus with adequate space for expansion” to submit applications by Sept. 27 to offer graduate programs.

The institution must have high-quality educational infrastructure, such as classrooms, a library, a computer lab, research centers, journals, publications and technology, with room for expansion of these facilities.

Currently, only two institutions offer a Post Graduate Programme in Insolvency (PGIP): the Indian Institute of Corporate Affairs and the National Law Institute, Bhopal University. At present, there are over 4,400 registered insolvency practitioners in the country.

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Experts believe the move will increase the workforce available to handle the complex tasks of debt resolution and corporate rescue.

Unlike previous initiatives, this time IBBI has included additional conditions, allowing it to select multiple institutions, modify expressions of interest or reject them without explanation, thereby ensuring that only the best institutions are chosen, said Yogendra Aldak, partner at Lakshmikumaran and Sridharan Attorneys.

“With the additional conditions, we could see IBBI selecting multiple institutions to conduct PGIP courses and this would result in more students becoming insolvency professionals with relevant skills and experience,” Aldak said.

These insolvency professionals would help simplify and streamline insolvency proceedings in India, protecting creditors and reviving businesses in a timely manner, Aldak said.

The Ministry of Corporate Affairs and IBBI have been trying to increase the number of bankruptcy cases resolved in a year, reduce the time taken for the process and improve the outcome of debt resolution.

Read also: The IBC delay story: Insolvency resolution must be accelerated for this reform to shine

In FY24, the National Company Law Tribunal approved a record 269 resolution plans, up from 189 in the previous year, marking a 42% improvement in rescuing distressed companies. Mint reported on June 11.

IBBI said that an insolvency professional plays a central role in the resolution, liquidation and bankruptcy processes of companies and individuals, acting as “the linchpin of the process and the link between the adjudicating authority and the stakeholders”.

Read also: Mint Explainer: Why bankruptcy reforms should be the new administration’s top priority