The objective of inspection of IPs is to ensure that all operations are performed in a manner that are in the interest of all stakeholders and all the provisions under the law are complied with. It aims to strengthen the regulatory framework for IPs by identifying, and responding appropriately to misconduct and poor performance. The goal is to improve the performance of IPs, increase the confidence in insolvency framework and regulatory regime and ensure better and more consistent outcomes for all stakeholders.
Following points to be observed during inspection:
- To check whether the records are being maintained by an IP in the manner required under the relevant regulations.
- To ascertain whether adequate internal control systems, procedures and safeguards have been established and are being followed by an IPs.
- To ascertain whether any circumstance exists which would render an IP unfit or ineligible.
- To ascertain whether the provisions of the Code or the rules, regulations and guidelines made thereunder and the directions issued by IBBI, if any, are being complied with.
- To ascertain availability of sufficient infrastructure and human resource with IP for handling the assignments(s).
Types of Inspection
Routine Inspection: Carried out as a sample on the basis of an Annual Inspection Plan, by short listing sample of IPs as per the Inspection Policy of the IPA.
Event Based Inspection: Carried out on the basis of IPs flagged under desktop monitoring, IPs against whom any grievance/complaint has been received, IPs who have contravened any provisions of the Code or Rules and regulations made thereunder, on receipt of any direction from Adjudicating Authority/IBBI/Governing Board or Monitoring Committee of IPA.
For further detail, please find the presentation shared during webinar held by ICSIIIP on April 13, 2020