The Insolvency and Bankruptcy Board of India notified the Insolvency and Bankruptcy Board of India (Liquidation Process) (Third Amendment) Regulations, 2026 on 19 May 2026 to amend Regulation 35 of the Liquidation Process Regulations, 2016. The amendment introduces a special valuation framework for corporate debtors classified as Micro, Small and Medium Enterprises (MSMEs) under the MSMED Act, 2006. Under the revised provision, the liquidator is required to appoint one registered valuer for each asset class of the corporate debtor. However, after consultation with the consultation committee and with recorded reasons, the liquidator may appoint two registered valuers where necessary. The amendment seeks to simplify and reduce the cost of liquidation proceedings for MSMEs while retaining flexibility in complex cases. Additionally, a drafting clarification has been made in the existing proviso to Regulation 35(2) by inserting the word “further.” The amendment came into force upon publication in the Official Gazette and aims to improve efficiency and practicality in MSME liquidation processes.
INSOLVENCY AND BANKRUPTCY BOARD OF INDIA
NOTIFICATION
New Delhi, the 19th May, 2026
Insolvency and Bankruptcy Board of India (Liquidation Process) (Third Amendment) Regulations, 2026
F. No. IBBI/2026-27/GN/REG142.—In exercise of the powers conferred by section 196 read with section 240 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), the Insolvency and Bankruptcy Board of India hereby makes the following regulations to further amend the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, namely: –
1. (1) These regulations may be called Insolvency and Bankruptcy Board of India (Liquidation Process) (Third Amendment) Regulations, 2026.
(2) They shall come into force on the date of publication in the Official Gazette.
2. In the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, (hereinafter referred to as „the principal regulations‟), in regulation 35, after sub-regulation (2), the following proviso shall be inserted, namely: –
“Provided that, in respect of a corporate debtor classified as a micro, small or medium enterprise under sub-section (1) of section 7 of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006), the liquidator shall appoint one registered valuer for each asset class of the corporate debtor, unless the liquidator after consultation with the consultation committee decides, for reasons to be recorded in writing, to appoint two registered valuers.”
3. In the principal regulations, in regulation 35, in proviso to sub-regulation (2), after the word “Provided”, the word “further” shall be inserted.”
RAVI MITAL, Chairperson
[ADVT.-III/4/Exty./97/2026-27]
Note : The Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 were published vide notification No. IBBI/2016- 17/GN/REG005, dated 15th December, 2016 in the Gazette of India, Extraordinary, Part III, Section 4, vide No. 460 on 15th December, 2016 and were last amended by the Insolvency and Bankruptcy Board of India (Liquidation Process) (Second Amendment) Regulations, 2026 published vide notification No. IBBI/2025-26/GN/REG136, dated the 25th February, 2026 in the Gazette of India, Extraordinary, Part III, Section 4, No.136 on 25th February, 2026.
