After India enacted tougher laws to deal with sticky loans and the central bank stepped in accelerate the pace of recoveries, finance executives have stumbled upon a career growth opportunity based, ironically, on insolvency. Independent insolvency professionals (IPs), are becoming critical for the success of a Rs 8-lakh crore recovery initiative. The Insolvency and Banking Board of India (IBBI), set up last autumn and taked with providing the framework for recovery proceedings, conducts exams that allow chartered accounts, company secretaries, cost accountants, and advocates to qualify as IPs.
Chartered and cost accountants, company secretaries, and lawyers with a minimum of 10 years of post-qualification experience may be eligible to be appointed as IPs. The IBBI has registered 396 IPs who have cleared their qualifying exams. There are 1,000 unregistered IPs. Former company CEOs, MDs, CGM, are also in the queue to qualify as IPs, which is seen as a crucial link in ensuring that competing claims from stakeholders are settled and funds made available for productive sectors of the economy.
The role of IPs comes with its own set of challenges. "Insolvency is the most promising, but and equally challenging career". In many cases, borrowers do not cooperate while sharing the details, and creditors insist on fast-track processing. The IPs have to manage everything, using all resources apart from their qualification experience help them to navigate the situation.
The primary objective of an IP is to find a resolution plan. The professionals can act in two ways: Interim Resolution Professional, who are appointed by the borrower for the first 30 days of proceedings at the National Company Law Board; and Resolution Professionals, who are usually appointed by the committee of creditors for the next 150-240 days of the stipulated period.
Insolvency professionals should first have huge convincing powers to deal with creditors, they need to deal with warring financial creditors and tell them clearly that they are gathering to draw up a resolution plan. An IP should be a mix bag of management, financial and legal skills. The scope for IPs would only increase as more bad loans come up for resolution.
IRPs and RPs (Interim Resolution Professionals and Resolution Professionals), collectively called IPs, can earn Rs 2 to Rs 15 lakh, depending on the size of business and debts of cases, professionals said. For cases between operational creditors and companies, income opportunities are in the range of Rs 50,000 to Rs 1,50,000 a month as the nature of the cases are less complex
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