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IBBI Proposes Framework for Creditor-Initiated Insolvency Resolution Process (CIIRP)

Pursuant to the Insolvency and Bankruptcy Code (Amendment) Act, 2026, which introduces Chapter IV-A (Sections 58A–58K), the Insolvency and Bankruptcy Board of India (IBBI) has released a Discussion Paper proposing the IBBI (Creditor-Initiated Insolvency Resolution Process) Regulations, 2026.

The proposed framework sets out a creditor-led, time-bound insolvency resolution process, designed to operate alongside the existing CIRP regime, with an emphasis on early-stage intervention and continuity of business operations.

Statutory Enabling Framework (IBC Amendment, 2026)

• The Amendment Act introduces a new Chapter IV-A, providing the statutory basis for CIIRP and empowering the Central Government to notify:
  • eligible classes of corporate debtors,
  • eligible financial creditors, and
  • applicable thresholds and conditions.
• The framework contemplates a creditor-initiated process with regulatory oversight, distinct from the traditional CIRP admission model.

Initiation Mechanism under Draft Regulations

• The draft regulations prescribe that CIIRP may be initiated by an eligible financial creditor upon:
  • preparation of a list of eligible financial creditors based on available records, and
  • obtaining approval of at least 51% in value of such creditors.
• A minimum 15-day notice is required for convening the creditor meeting to consider initiation.
• The corporate debtor must be served with a notice of intent and is entitled to submit a representation within 30 days, which is required to be considered prior to proceeding.
• Post consideration, the initiating creditors are required to reconfirm approval (51%) before commencement.

Commencement and Institutional Structure

• Upon approval, the applicant is required to appoint a Resolution Professional within 3 days, subject to eligibility requirements along with a written consent of the professional and confirmation of no pending disciplinary proceedings.
• The Resolution Professional must:
  • make a public announcement within 3 days, and
  • file an initiation and compliance report with the Adjudicating Authority and the IBBI.
• Claims are verified and the Committee of Creditors (CoC) is constituted within a compressed timeline, followed by its first meeting within 3 days of constitution.

Management and Oversight During CIIRP

• The draft framework provides that the corporate debtor continues to manage its affairs, subject to specified restrictions.
• The corporate debtor is required to:
  • refrain from actions prejudicial to creditors, and
  • obtain prior approval of the CoC for specified transactions.
• The Resolution Professional is vested with oversight powers, including access to information, inspection of assets, and participation in governance processes.

Moratorium Framework

• The declaration of moratorium is not automatic and requires:
  • application by the Resolution Professional, and
  • approval of at least 51% of creditors.
• The application is subject to adjudication by the NCLT, with public announcement obligations attached to filing and outcome.

Resolution Process and Timelines

• The Resolution Professional is required to:
  • invite expressions of interest by around the 50th day, and
  • provide a minimum 15-day window for submission of resolution plans.
• The CoC may adopt a challenge mechanism during plan evaluation.
• The Discussion Paper provides a model timeline of approximately 150 days for completion of the process.

Conversion and Exit

• The CoC may, by a 66% voting threshold, resolve to convert CIIRP into CIRP, upon which the Resolution Professional must apply to the Adjudicating Authority within 3 days.
• Withdrawal of CIIRP is permitted, subject to prescribed conditions including provision of a bank guarantee towards process costs.

Model Timeline under CIIRP

The Discussion Paper prescribes a structured ~150-day timeline, as follows:

Prescribed Forms under CIIRP

The Discussion Paper introduces a standardised set of forms (C-1 to C-11) governing each stage of the process:

1. Form C-1 – Notice of initiation to eligible financial creditors
2. Form C-2 – Notice of initiation to corporate debtor
3. Form C-3 – Written consent to act as Resolution Professional
4. Form C-4 – Public announcement of CIIRP
5. Form C-5 – Intimation of initiation to Adjudicating Authority and IBBI
6. Form C-6 – Removal or replacement of Resolution Professional
7. Form C-7 – Objection by corporate debtor
8. Form C-8 – Public announcement of moratorium application
9. Form C-9 – Public announcement of rejection of moratorium
10. Form C-10 – Invitation for Expression of Interest (EOI)
11. Form C-11 – Application for withdrawal of CIIRP

Regulatory Alignment

• The draft regulations provide that several provisions of the CIRP Regulations, 2016 will apply mutatis mutandis, including those relating to claims, CoC functioning, and resolution plans.
• This ensures procedural continuity while introducing a distinct creditor-led entry and governance structure.

Market Implication

• The proposed CIIRP framework introduces a form-driven, creditor-led insolvency process with defined procedural milestones and timelines, aimed at enabling early-stage resolution while preserving business continuity.
• The use of standardised forms (C-1 to C-11) and a compressed timeline indicates a move towards greater procedural discipline, speed, and transparency within the insolvency framework.

Comments on the Discussion Paper are invited by 28 April 2026.

Copy of the Discussion Paper is attached below.

Discussion Paper CIIRP