Should India Consolidate Its Insolvency Professional Agencies?

India created insolvency professional agencies at the founding stage of the Insolvency and Bankruptcy Code, 2016 because a new statutory profession needed institutional scaffolding. That choice made sense. The Code needed qualifying pathways, member administration, ethics structures, continuing education, grievance channels and a first line of professional discipline. A regulator alone could not build all of that overnight. But institutional design that is sensible at market birth is not necessarily optimal after a decade of operation. India now has an established apex regulator in the Insolvency and Bankruptcy Board of India (IBBI), a mature body of subordinate regulation, a larger stock of operational experience, and three recognised insolvency professional agencies (IPAs) that perform broadly similar functions within the same framework. The question is no longer how to create the profession. It is how to regulate it better.

The live policy issue, then, is not whether three agencies were justified in 2016. It is whether three agencies still improve regulatory outcomes in 2026. The right benchmark is public-interest performance: consistency, independence, supervisory clarity, disciplinary credibility, cost, and the ability to see problems across the market before they become systemic. On that test, a strong case now exists for reviewing the three-IPA model. Yet the review should not begin with a simplistic assumption that three bodies must be forcibly collapsed into one. A more careful conclusion is that India should move first toward regulator-led consolidation under IBBI, sharply harmonising standards and centralising core oversight functions, while keeping full organisational merger as a later option if evidence shows that separate agencies no longer add distinct value.

Figure 1. Reform spectrum for India’s IPA architecture

The comparative experience that most usefully frames this debate comes from the United Kingdom. The UK has long regulated a relatively small insolvency profession through multiple recognised professional bodies, overseen by the Insolvency Service. In December 2021, the UK government opened a consultation on The future of insolvency regulation, arguing that a system built around multiple bodies had become too complex and had struggled to deliver sufficient consistency, transparency and accountability. The consultation proposed a single regulator of insolvency practitioners, firm-level regulation, a public register and reforms to standards, redress and bonding arrangements. In September 2023, the government response accepted much of the logic for stronger central control, but decided not to create a single regulator within the Insolvency Service immediately. The government instead chose to press for measurable improvements from the recognised professional bodies, take control of standards in key areas, and keep a legislative reserve power to create an independent single regulator later if needed.[1][2]

That nuance matters for India. The UK did not conclude that multiple bodies were ideal. It concluded that immediate abolition of them inside the existing state structure carried material risks of disruption, independence concerns and implementation cost. The government response said, in substance, that the centre should be strengthened first and deeper structural consolidation kept available if non-legislative and targeted legislative reforms failed to deliver. The 2024 Annual Review of Insolvency Practitioner Regulation shows the system still operating through four recognised professional bodies during that year, but it also records a narrowing trend: Chartered Accountants Ireland approved a proposal to cease regulation of insolvency practitioners, the process to revoke its status began in 2024, and practitioners who wished to continue in practice transferred to the remaining bodies by early 2025.[3] The UK lesson is therefore not “leave fragmentation alone.” It is “centralise functions and test performance before forcing wholesale institutional redesign.”

India’s own architecture is, of course, different. Under the Insolvency and Bankruptcy Code, 2016, IPAs are recognised entities within a statutory framework set and supervised by IBBI. The Code allocates recognition, functions and obligations to insolvency professional agencies and separately regulates insolvency professionals, while vesting broad supervisory and regulatory powers in IBBI. In particular, the structure around sections 196 and 201 to 208 of the Code makes clear that IPAs are not autonomous sovereign regulators; they are first-line professional agencies operating within a framework that the Board designs and enforces.[4] On the current IBBI service-provider register, there are still three recognised IPAs: the Indian Institute of Insolvency Professionals of ICAI, the ICSI Institute of Insolvency Professionals, and the Insolvency Professional Agency of the Institute of Cost Accountants of India.[5] IBBI’s legal framework pages also show that the governing rules remain live and actively updated, including the January 2025 amendment to the Model Bye-Laws and Governing Board of Insolvency Professional Agencies Regulations and earlier amendments to the IPA regulations.[6]

That legal design is important because it limits the argument that India somehow needs institutional multiplicity in order to preserve plural sources of rule-making. In reality, the core rulebook already comes from the centre. Entry standards, conduct obligations, educational pathways, grievance rules, inspection frameworks and disciplinary expectations are not being created afresh by three philosophically distinct regulators. They are being administered through three agencies with functional overlap. Where the real variation between agencies is narrow, the burden of maintaining separate governance structures, committees, technology systems, reporting practices and disciplinary pipelines becomes harder to justify.

A case for consolidation in India can therefore be made on five grounds.

First, consistency. A profession entrusted with insolvency resolution and liquidation should not send mixed regulatory signals. Even where the black-letter regulations are common, differences in interpretation, monitoring intensity, publication style, advisory practices or disciplinary culture can produce avoidable unevenness. Creditors, tribunals, debtors and professionals should be able to understand what the system expects without reading those expectations through three institutional filters.

Second, clarity of accountability. Where a profession is supervised through multiple first-line bodies, it becomes easier for responsibility to blur. If complaints handling, continuing education, monitoring and discipline are split across separate institutional channels, outsiders can struggle to identify where effective responsibility lies. The UK’s answer to this problem included a single complaints gateway and a stronger public-information architecture.[2][3] India has not yet reached the point of saying only one institution can solve accountability problems, but it should ask whether a more centralised public dashboard, a common disciplinary disclosure framework and standardised complaint analytics would improve confidence more than the present arrangement.

Third, reduced duplication. Three agencies mean three boards, three sets of committees, three administrative stacks, and repeated expenditure on similar functions. Some of that duplication may be acceptable when a profession is being built. It becomes less attractive when the profession is established and the public value of maintaining separate infrastructures is uncertain.

Fourth, better data. Strong regulation increasingly depends on what can be seen across the system: complaint volumes, complaint outcomes, inspection intervals, educational performance, disciplinary timeframes, sector concentrations and repeat risk indicators. Fragmented first-line architecture makes clean market-wide analysis harder. IBBI is institutionally better placed to host common dashboards and issue comparable metrics.

Fifth, conflict management. Member bodies are often asked to perform two roles that sit uneasily together: advancing members professionally while policing them in the public interest. The UK government response recognised this tension and placed weight on regulatory independence.[2] India should do the same. Even if full merger is not immediately chosen, there is a strong case for ensuring that the public-interest aspects of regulation are carried closer to IBBI and farther from membership-facing incentives.

Table 1. UK and India at a glance: structure of insolvency professional oversight

Still, the case against merger is serious and should not be brushed aside. A single body can become complacent. It can concentrate too much power in one institutional site. It can become bureaucratic, slower to innovate, or easier for dominant interests to capture. Competition between agencies can sometimes improve member services, continuing education and responsiveness. India must also take into account that the three existing IPAs are tied to larger professional ecosystems. Those linkages may support training depth, professional pipelines and institutional legitimacy in ways a newly merged standalone body would have to rebuild. In other words, the choice is not between disorder and perfection. It is between different risk profiles.

This is where one round of harder criticism improves the analysis. If the argument for merger rests only on institutional neatness, it is weak. Public administration should not be reorganised just because three bodies look untidy on an organogram. The real question is whether multiplicity is causing measurable harm or blocking measurable gains. India does not yet have a public evidence base robust enough to prove that one merged IPA would immediately outperform a reformed three-IPA system. That uncertainty is exactly why a staged path is preferable. It captures most of the likely benefits of consolidation while avoiding an irreversible organisational step before the evidence is ready.

Operational feasibility also argues against a rushed merger. It is easy to say that three agencies should become one. It is much harder to combine memberships, fee structures, educational records, grievance histories, disciplinary files, staffing models, technology systems, parent-institution relationships and governance arrangements. Pending matters would need ring-fenced transition rules. Professionals would need certainty about status and continuing education compliance. Complaints could not be allowed to stall. Data migration would have to preserve audit trails. Any ambiguity on these points could create exactly the kind of credibility loss that reform is supposed to prevent.

Figure 2. Transition risk map for any consolidation move

The transition risks are therefore concrete rather than theoretical. A poorly sequenced reform could produce a regulatory vacuum in complaint handling or discipline. It could invite litigation over transferred memberships, fees or governance rights. It could produce weak data continuity if historic records do not map cleanly. It could also create a perception problem: market participants may read consolidation as centralisation for its own sake unless it is explicitly tied to better disclosures, faster discipline, more consistent inspections and clearer public accountability. These are reasons for careful sequencing, not reasons to avoid reform altogether.

The better policy path is a staged regulator-led consolidation under IBBI.

Phase one should centralise the architecture that most directly affects public confidence. IBBI should issue a common inspection manual, a unified disciplinary disclosure template, common reporting standards for complaints and grievance outcomes, and a shared baseline for continuing professional education. It should also host a market-wide public dashboard showing, at minimum, membership counts, complaints received, complaints disposed of, average disposal time, inspections completed, adverse findings and disciplinary outcomes across all IPAs on a comparable basis.

Phase two should reduce unnecessary diversity in first-line supervision. Complaint intake standards, inspection triggers, risk-scoring formats and publication practices should be brought onto common rails. If an insolvency professional, creditor or tribunal looks at the output of one IPA, it should be materially comparable with the output of another.

Phase three should be evidence review. After a fixed period, such as twenty-four months, IBBI or an independent review panel should assess whether the three agencies still produce distinct public value. The test should not be institutional sentiment. It should be outcomes: whether multiplicity improved quality, innovation, accessibility or resilience enough to justify its costs.

Only phase four, if warranted by evidence, should contemplate full structural merger into a single IPA or an even more regulator-centred model in which IPAs become thinner member-service platforms while IBBI performs most substantive supervisory work. By that stage, much of the difficult standardisation would already have been done. The transition would be smaller, the gains clearer and the disruption easier to manage.

Table 2. India reform options compared

India should therefore review the three-IPA structure now, but it should not confuse urgency of review with urgency of merger. The strongest reform case today is not for institutional simplification as an end in itself. It is for regulatory unity where unity matters most: standards, data, complaints architecture, inspection method, disciplinary signalling and public accountability. If those functions are centralised under IBBI and the system still shows avoidable duplication, unevenness or weak market discipline, then a later move to one IPA will be far easier to defend.

Insolvency regulation exists to protect confidence in difficult moments of financial failure. That confidence depends less on the number of institutions in the chart than on whether the system speaks clearly, acts consistently and disciplines credibly. India’s future architecture may well be more centralised than its founding design. But good reform will come from proving which functions need one centre, not from assuming that one institution is the answer to every problem.