JSA Newsletter | Finance | June 2026 Edition

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June 2026 brought significant regulatory developments across India’s financial services sector. The Reserve Bank of India (“RBI”) introduced a series of amendments to the foreign exchange and banking framework, including revisions to Foreign Portfolio Investor (“FPI”) investment limits in Government Securities (“G-Secs”), reduced timelines for realisation of export proceeds, a new swap facility for Foreign Currency Non-Resident (“FCNR”) (B) deposits, liberalised provisions for Special Non-Resident Rupee (“SNRR”) accounts, and revised reporting and compliance requirements for authorised persons under the Foreign Exchange Management Act, 1999 (“FEMA”). RBI also provided exemptions to eligible unregistered Type I Non-Banking Financial Companies (“NBFCs”) from registration requirements and revised the application process for voluntary surrender of NBFC registration. RBI has also introduced swap facilities for External Commercial Borrowings (“ECBs”) and Overseas Foreign Currency Borrowings (“OFCBs”), and bank financing for Real Estate Investment Trusts and Infrastructure Investment Trusts.

On the capital markets front, the Securities and Exchange Board of India (“SEBI”) issued guidelines permitting Alternative Investment Funds (“AIFs”) to retain liquidation proceeds beyond their permissible fund life and obtain ‘Inoperative Fund’ status in specified circumstances.

The Insolvency and Bankruptcy Board of India (“IBBI”) issued comprehensive amendments to the insolvency framework, including changes to the inspection and investigation regulations, strengthened authentication and dispute resolution mechanisms for information utilities, revised documentation requirements for pre-packaged insolvency resolution processes, enhanced disclosure and procedural reforms for the Corporate Insolvency Resolution Process (“CIRP”), enhanced creditor participation, and streamlined cost assessment mechanisms in CIRP. It has also introduced new asset disclosure requirements for personal guarantor insolvency proceedings, a coordination framework for asset transfers in bankruptcy proceedings, strengthened claims and termination mechanisms for voluntary liquidation, governance and timeline reforms for the liquidation process, streamlined complaint filing frameworks, and comprehensive valuation guidelines to enhance consistency and transparency.

The Ministry of Finance (“MoF”) amended the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, permitting individual persons resident outside India to invest in equity instruments of listed Indian companies on recognised stock exchanges, subject to enhanced investment limits and applicable conditions.

RBI updates

Amendments to the regulatory framework on investments by the FPIs in G-Secs

RBI, vide circular dated June 5, 2026, has introduced amendments to the regulatory framework governing investments by FPIs in G-Secs. Some of the key amendments are as follows:

the requirement for FPIs to comply with the short-term investment limit, security-wise limit, and concentration limit, for their investments in G-Secs under the general route is withdrawn;
the ‘general’ and ‘long-term’ sub-categories of investment limits for Central G-Secs and State G-Secs have been merged into a single limit for each category;
the investment limits for investment in Central G-Secs and State G-Secs for financial year 2026–27 have been revised;
the definitions of ‘long-term FPIs and short-term investments’ have been omitted from the RBI (Non-resident Investment in Debt Instruments) Directions, 2025;
the proviso exempting investments made under the special rupee vostro account route from the short-term investment limit has been omitted as a consequential change; and
new instruments are added under the Fully Accessible Route (“FAR”) as ‘specified securities’. Under FAR, all new issuances of 5 (five) year, 7 (seven) year, 10 (ten) year, 15 (fifteen) year, 30 (thirty) year and 40 (forty) year tenors by the Central Government (including new issuances of ‘sovereign green bonds’ in these tenors); and any other security as specified by RBI, are included (previously FAR included all new issuances of only 5 (five) year, 7 (seven) year, 10 (ten) year tenors).

Key takeaway: RBI has withdrawn the requirement for FPIs to comply with the short-term investment limit, security-wise limit, and concentration limit for investments in G-Secs under the general route, merged the ‘general’ and ‘long-term’ sub-categories into a single limit, and expanded the FAR by including new issuances of 15 (fifteen) year, 30 (thirty) year and 40 (forty) year tenors as ‘specified securities’.

Foreign Exchange Management (Export of Goods and Services) (First Amendment) Regulations, 2026

RBI, vide circular dated June 5, 2026, has amended the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015 by amending the provisions pertaining to the period within which export value of goods/software/ services to be realised. Some of the key amendments are as follows:

in Regulation 9(1), the period for realisation of export proceeds is reduced to 9 (nine) months (earlier this was 15 (fifteen) months); and
in Regulation 9(2)(a), the reference period is reduced to 9 (nine) months (earlier this was 15 (fifteen) months).

Key takeaway: RBI has amended the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015, reducing the period for realisation of export proceeds from 15 (fifteen) months to 9 (nine) months.

Swap facility for FCNR (B) deposits

RBI, vide circular dated June 8, 2026, has introduced a United States Dollar (“USD”) – Rupee forex swap facility for fresh FCNR (B) deposits. Some of the key provisions are as follows:

the swap facility will be available to Authorised Dealer (“AD”) Category-I banks for fresh FCNR (B) deposits mobilised in any freely convertible currency (including deposits renewed upon maturity) for a minimum tenor of 3 (three) years and a maximum tenor of 5 (five) years; however, the swap with RBI will be available in USD only;
the tenor of the swap must be in alignment with the tenor of the underlying deposits;
banks must maintain separate records for FCNR (B) deposits covered under this scheme along with a proper audit trail of transactions, and will be free to price these deposits as per their internal policy but within the overall ceiling prescribed by RBI;
the underlying deposits are subject to a lock-in of 1 (one) year (with premature withdrawal thereafter permitted at the discretion of the banks as per their internal policy); however, swaps undertaken with RBI cannot be cancelled; and
the swap facility comes into effect immediately and will remain open until October 16, 2026, for deposits mobilised between the date of the circular and September 30, 2026.

Key takeaway: RBI has introduced a USD-Rupee forex swap facility for fresh FCNR (B) deposits with a minimum tenor of 3 (three) years and a maximum tenor of 5 (five) years. The facility is available to AD Category-I banks and will remain open until October 16, 2026, with underlying deposits subject to a 1 (one) year lock-in period.

Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) (Amendment) Regulations, 2026

RBI, vide notification dated June 13, 2026, has amended the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019. Some of the key amendments are as follows:

Schedule III is substituted to provide that investments by individuals resident outside India on a repatriation basis must be made through inward remittance from abroad through banking channels or out of funds held in any repatriable deposit account maintained under the Foreign Exchange Management (Deposit) Regulations, 2016 (“Deposit Regulations”). A designated repatriable rupee account is required to be maintained exclusively for investments permitted under the Schedule;
Schedule III is amended to provide that subscriptions to the National Pension System (“NPS”) by Non-Resident Indian (“NRIs”) and Overseas Citizen of India (“OCIs”) may be made through inward remittance from abroad through banking channels or out of funds held in any repatriable foreign currency account, repatriable rupee account, or NRO account maintained under the Deposit Regulations. Further, sale proceeds of equity instruments may be remitted outside India or credited to the designated rupee account, while proceeds from mutual fund units and NPS investments may be remitted outside India or credited to any account maintained under the Deposit Regulations, at the option of the NRI/OCI investor;
Schedule XI is substituted to provide that payment for purchase or subscription of equity shares of Indian companies listed on international exchanges may be made through banking channels to the foreign currency account of the Indian company maintained under the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations, 2015, or through inward remittance from abroad or funds held in any repatriable foreign currency or rupee account maintained under the Deposit Regulations. Sale proceeds may be remitted outside India or credited to the permissible holder’s bank account maintained under the Deposit Regulations; and
Regulation 4(9) is amended to require designated AD Category-I banks to report to RBI, in Form LEC (IFI), the purchase or transfer of equity instruments by an individual person resident outside India, including NRIs and OCIs, on stock exchanges in India.

Key takeaway: RBI has amended the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019, revising the payment and reporting requirements for investments by NRIs and OCIs, including provisions for NPS subscriptions, equity shares of Indian companies listed on international exchanges, and reporting obligations for AD Category-I banks.

Liberalisation of FPI under Schedule III of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019

Pursuant to the Foreign Exchange Management (Non-debt Instruments) (Third Amendment) Rules, 2026, RBI, vide circular dated June 15, 2026, has liberalised the FPI framework under Schedule III of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, by permitting all individual persons resident outside India (and not only NRIs and OCI) to invest in equity instruments of listed Indian companies on recognised stock exchanges, subject to enhanced investment limits and applicable conditions. AD Category-I banks are permitted to facilitate such investments by opening repatriable INR accounts and must ensure compliance with existing reporting, monitoring, and limit-tracking frameworks applicable to FPIs.

Key takeaway: RBI has liberalised the FPI framework under Schedule III of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, permitting all individual persons resident outside India (not only NRIs and OCIs) to invest in equity instruments of listed Indian companies on recognised stock exchanges, subject to enhanced investment limits and applicable conditions.

Foreign Exchange Management (Deposit) (Sixth Amendment) Regulations, 2026

RBI, vide notification dated June 18, 2026, has amended the Deposit Regulations, to provide greater flexibility in the operation of SNRR accounts and to incorporate provisions relating to International Financial Services Centres (“IFSCs”). Some of the key amendments are as follows:

any person resident outside India may now open, hold and maintain SNRR accounts with ADs in India or their branches outside India, including branches located in an IFSC in India;
transfers from non-resident ordinary account to non-resident external accounts or SNRR accounts are permitted within the limits prescribed under the Foreign Exchange Management (Remittance of Assets) Regulations, 2016;
the scope of SNRR accounts has been expanded to allow permissible current and capital account transactions with residents in India, as well as bona fide transactions with persons resident outside India;
restrictive provisions relating to SNRR accounts have been removed through deletion of certain paragraphs in Schedule 4 of the Deposit Regulations; and
transactions between persons resident outside India through SNRR accounts, which may not be subject to compliance under the FEMA or the rules and regulations framed thereunder may be undertaken based on instructions from the account holder specifying the underlying purpose of the transfer.

Key takeaway: RBI has amended the Deposit Regulations to provide greater flexibility in the operation of SNRR accounts and to incorporate provisions relating to IFSCs. Non-residents may now open SNRR accounts with ADs in India or their branches outside India, including branches located in an IFSC in India, and undertake permissible current and capital account transactions.

Reporting of FCNR(B) deposits, ECBs and OFCBs mobilised under RBI swap facility

RBI, vide circular dated June 19, 2026, has prescribed reporting requirements for AD Category-I banks in respect of foreign currency funds mobilised under the swap facilities for FCNR(B) deposits, ECBs, and OFCBs. The reporting framework aims to facilitate timely monitoring of funds mobilised under the RBI’s swap facilities. The data must be submitted in the prescribed formats provided as Annex I for FCNR(B) deposits, Annex II for ECBs, and Annex III for OFCBs of the circular, to the respective RBI-designated email addresses.

Banks were required to submit data relating to FCNR(B) deposits, ECBs, and OFCBs from June 8, 2026 till the date of issuance of the circular, along with the first reporting due on June 22, 2026.

Key takeaway: RBI has prescribed reporting requirements for AD Category-I banks in respect of foreign currency funds mobilised under the swap facilities for FCNR(B) deposits, ECBs, and OFCBs. Data must be submitted in prescribed formats (Annex I, II and III of the circular) to facilitate timely monitoring of funds mobilised under RBI’s swap facilities.

Modification of returns/reporting requirements under FEMA

RBI, vide circular dated June 24, 2026, has revised the reporting requirements under FEMA and the Foreign Exchange Management (Authorised Persons) Regulations, 2026. The changes aim to simplify compliance, streamline reporting obligations, and update reporting formats for authorised persons, money changers, and entities operating under the Money Transfer Service Scheme (“MTSS”). Some of the key provisions are as follows:

the format of the FLM-8 return has been revised to include reporting of foreign currency notes written off, and the requirement for prior RBI approval for write-off of foreign currency notes exceeding USD 2,000 (USD two thousand) has been discontinued;
authorised persons with franchisee arrangements and Indian Agents under MTSS are required to submit quarterly lists of franchisees and sub-agents, respectively, within 15 (fifteen) days from the end of each calendar quarter;
prescribed formats of registers FLM-1 to FLM-7 (form numbers) have been discontinued, although entities must continue to maintain complete records of foreign exchange transactions for regulatory inspection purposes;
certain reporting requirements, including returns relating to foreign currency accounts funded through export proceeds, MTSS additional location disclosures, quarterly veracity confirmations, and statements of collateral under MTSS, have been discontinued; and
new and revised reporting formats have been prescribed, including formats relating to foreign currency transactions, forex correspondents, franchisee arrangements, and fit and proper criteria for promoters, directors, and key managerial personnel.

Key takeaway: RBI has revised the reporting requirements under FEMA and the Foreign Exchange Management (Authorised Persons) Regulations, 2026, simplifying compliance, streamlining reporting obligations, discontinuing certain formats (FLM-1 to FLM-7), and prescribing new and revised reporting formats for authorised persons, money changers, and MTSS entities.

Eligible unregistered type I NBFCs exempt from registration requirements

RBI, vide notification dated June 23, 2026, has exempted certain NBFCs from the requirements relating to registration under Section 45IA and maintenance of a reserve fund under Sections 45IA and 45IC of the Reserve Bank of India Act, 1934. The exemption is subject to specified conditions, which include the following:

the exemption is available only where the NBFC operates without public funds and without any customer interface as its conscious and long-term business model;
the NBFC must have an asset size of less than INR 1,000 crore (Indian Rupees one thousand crore), based on its latest audited balance sheet;
the board of directors must pass an annual resolution at the beginning of each financial year confirming that the NBFC will not avail public funds or have any customer interface during that year; and
the NBFC must disclose in the notes to accounts to its financial statements that it is an ‘Unregistered Type I NBFC’, together with its status regarding public funds and customer interface.

Key takeaway: RBI has exempted certain NBFCs from registration requirements under Section 45IA and maintenance of a reserve fund under Sections 45IA and 45IC of the Reserve Bank of India Act, 1934, provided they operate without public funds, without customer interface, and have an asset size of less than INR 1,000 crore.

Revision to the application process for voluntary surrender of NBFC registration

RBI, vide circular dated June 30, 2026, has revised the application form and indicative checklist for voluntary surrender of the Certificate of Registration (“CoR”) by NBFCs, including housing finance companies, following the 2026 amendments relating to unregistered Type I NBFCs. Applications for cancellation of CoR must be submitted through the PRAVAAH portal with the prescribed documents. RBI has clarified that submission of an application does not amount to cancellation of the CoR, and NBFCs must continue to comply with all regulatory requirements until the cancellation is formally approved and communicated.

Key takeaway: RBI has revised the application form and indicative checklist for voluntary surrender of CoR by NBFCs, including housing finance companies. NBFCs must continue to comply with all regulatory requirements until the cancellation is formally approved.

SEBI update

Guidelines for winding up of AIFs and introduction of ‘Inoperative Fund’ status

SEBI, vide circular dated June 16, 2026, has issued guidelines permitting AIFs and erstwhile Venture Capital Funds, to retain liquidation proceeds beyond their permissible fund life and obtain an ‘Inoperative Fund’ status in specified circumstances. Some of the key provisions are as follows:

AIFs may retain liquidation proceeds beyond the liquidation or dissolution period where: (a) a litigation notice, tax demand, regulatory communication or similar legal claim has been received; (b) at least 75% of investors by value consent to retention for anticipated liabilities; or (c) monies are required for residual winding-up related operational expenses;
where retention is based on anticipated liabilities, the manager of the AIF must disclose the amount proposed to be retained and the estimated retention period to investors of the fund while seeking their consent;
retention of monies for residual operational expenses cannot exceed 3 (three) years from the end of the permissible fund life and must be supported by invoices, records or comparable expense data;
retained monies must be invested only in permitted liquid instruments in accordance with the SEBI (AIFs) Regulations, 2012;
AIFs having retained monies and intending to surrender their registration may apply to SEBI for ‘Inoperative Fund’ status, and such status may also be obtained where no monies are retained but the fund continues solely in anticipation of a favourable litigation outcome;
an AIF tagged as an ‘Inoperative Fund’ cannot launch new schemes or charge management fees and must continue to invest retained monies in accordance with regulatory requirements;
‘Inoperative Funds’ are exempt from several ongoing compliance requirements, including activity reports, compliance test reports, performance benchmarking disclosures, valuation requirements, investor reporting obligations and certain certification and custodial requirements; and
AIFs with retained monies and AIFs tagged as ‘Inoperative Funds’ must submit an annual status report to SEBI and investors, within 30 (thirty) days from the end of each financial year, detailing retained amounts, outstanding liabilities, investments made from retained monies and the expected timeline for resolution.

Key takeaway: SEBI has issued guidelines permitting AIFs and erstwhile Venture Capital Funds to retain liquidation proceeds beyond their permissible fund life and obtain ‘Inoperative Fund’ status in specified circumstances. AIFs with retained monies and ‘Inoperative Funds’ must submit an annual status report to SEBI and investors, while ‘Inoperative Funds’ are exempt from several ongoing compliance requirements.

IBBI updates

IBBI (Inspection and Investigation) (Amendment) Regulations, 2026

IBBI, vide notification dated June 1, 2026, has amended the IBBI (Inspection and Investigation) Regulations, 2017 (“Inspection Regulations”). The amendments are intended to align the inspection and investigation framework with the Insolvency and Bankruptcy Code, 2016 (“IBC”). Some of the key changes under the amendments are as follows:

the definition of ‘disciplinary committee’ has been expanded to refer to a committee consisting of 1 (one) or more persons, as provided under Section 220(1) of the IBC, instead of restricting it to only whole-time member(s) constituted by IBBI;
the term ‘service provider’ has been aligned with the broader definition under Section 3(31A) of the IBC, replacing the earlier list of insolvency professional agencies, insolvency professionals, insolvency professional entities, and information utilities; and
the amendment to Regulation 14 (1), relating to restitution, clarifies that the directions must be issued by the Disciplinary Committee.

Pursuant to the amendments, IBBI has also issued a circular dated June 3, 2026, specifying the revised format for filing claims under Regulation 14(3) of the Inspection Regulations.

Key takeaway: IBBI has amended the Inspection Regulations to align the inspection and investigation framework with the IBC, expanding the definition of ‘disciplinary committee’ and aligning the term ‘service provider’ with Section 3(31A) of the IBC.

IBBI (Information Utilities) (Amendment) Regulations, 2026

IBBI, vide notification dated June 1, 2026, has amended the IBBI (Information Utilities) Regulations, 2017 (“Information Utilities Regulations”). The amendments introduce important changes to the authentication of defaults and the dispute resolution framework. Some of the key amendments are as follows:

a new term ‘information of dispute’ has been introduced to mean the status of authentication of a default, issued in a format notified by IBBI through a circular;
Regulation 21(3) has been amended to restructure the authentication status table. Where a debtor confirms a default or does not respond after 3 (three) reminders, the default is treated as ‘authenticated’ and a record of default is issued. Where a debtor disputes the default, the status is ‘disputed’ and an information of dispute is issued; and
where a debtor disputes only a part of the default amount or only non-financial information, and the creditor is a financial institution, the information utility is required to treat the undisputed portion of the default as ‘authenticated’; and
the scope of partial dispute authentication has been expanded from scheduled banks to all financial institutions as defined under Section 3(14) of the IBC, enabling NBFCs, housing finance companies, AIFs, and other non-bank financial creditors to obtain authenticated records of default for undisputed portions of disputed defaults.

Pursuant to the amendments, IBBI has also issued a circular dated June 3, 2026, specifying the revised formats for registration of information utilities and for submission, authentication, and issuance of debt, default, and dispute-related information, including Form A (application for certificate of registration or renewal of registration), Form B (certificate of registration as an information utility), Form C (submission of information by user to information utility), Form D (record of default), and Form E (information of dispute).

Key takeaway: IBBI has amended the Information Utilities Regulations to introduce a new ‘information of dispute’ status, restructure the authentication status table, and require information utilities to treat undisputed portions of defaults as ‘authenticated’ where the debtor disputes only part of the default amount.

IBBI (Pre-Packaged Insolvency Resolution Process) (Third Amendment) Regulations, 2026

IBBI, vide notification dated June 1, 2026, has amended the IBBI (Pre-Packaged Insolvency Resolution Process) Regulations, 2021, overhauling the documentation requirements for pre-packaged insolvency applications. Some of the key amendments are as follows:

Regulation 18 has been substituted with a detailed new provision requiring the corporate applicant to furnish 7 (seven) categories of information/documents: (a) declaration by majority of directors/partners; (b) special resolution for initiating pre-packaged insolvency resolution process under Section 54A of the IBC; (c) proof of approval from financial creditors (≥51% in value, excluding related parties); (d) insolvency professional details (written consent and Section 54B(1)(a) report); (e) audited financial statements for the last 2 (two) financial years; (f) provisional financial statements for the current financial year; and (g) authorised representative forms for classes of creditors; and
the Schedule containing the earlier prescribed forms (P1 through P14) has been omitted.

Key takeaway: IBBI has overhauled documentation requirements for pre-packaged insolvency applications, requiring corporate applicants to furnish 7 (seven) categories of information/documents and omitting the earlier prescribed forms (P1 through P14).

IBBI (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2026

IBBI, vide notification dated June 1, 2026, has amended the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The amendments introduce enhanced disclosure requirements, strengthen procedural safeguards, and provide new mechanisms for asset transfers, withdrawal of applications, and dissolution during the CIRP. Some of the key amendments are as follows:

Regulation 2B has been substituted to prescribe detailed disclosure requirements for operational creditors, including GSTR-1 and GSTR-3B extracts, e-way bills, details of partial payments, assignment or transfer of debt, guarantees, statements of account, related party disclosures, and pending recovery proceedings;
a new Regulation 2E has been inserted, requiring corporate applicants filing under Section 10 of the IBC to furnish exhaustive information and documents relating to the corporate debtor, covering books of account for the preceding 3 (three) financial years, assets (including movable, immovable, intangible, and virtual digital assets), creditors, ongoing litigation, employee dues, subsidiaries and associates, guarantees, related party transactions, regulatory approvals, statutory compliances, joint development agreements, attached assets, enforcement actions, proceedings under the Prevention of Money Laundering Act, 2002, the Prohibition of Benami Property Transactions Act, 1988 and FEMA and allottee details;
new sub-regulations 3(1A) and 3(1B) have been inserted, requiring the interim resolution professional to intimate its continuation as the resolution professional within 3 (three) days of the Committee of Creditors’ (“CoCs”) approval and prescribing written consent requirements for proposed resolution professionals;
Regulation 3A has been amended to expand its scope from personnel, promoters, and persons associated with the management to all persons covered under Section 19 of the IBC;
Regulation 4(3) has been substituted to empower the interim resolution professional or resolution professional to seek information or records from any creditor, including financial institutions and statutory authorities, such as valuation reports, stock statements, receivables statements, inspection reports, audit reports, stock audit reports, title search reports, technical officers’ reports, and bank account statements. A new proviso requires every creditor, at the first meeting of the CoCs, to furnish all information and records in its possession relating to the assets and liabilities of the corporate debtor;
Regulation 13(1A) has been substituted to require the interim resolution professional or resolution professional, after verification of claims, to either admit or reject the claim, in whole or in part, and to communicate the decision along with reasons to the creditor within 7 (seven) days of such admission or rejection;
new Regulations 28A and 28B have been inserted to establish a framework for the transfer of guarantor assets. Regulation 28A sets out the procedure for transferring assets of personal and corporate guarantors taken into possession by creditors, including CoCs’ approval, disclosures in the information memorandum, and treatment of sale proceeds under Section 28A(3) of the IBC. Regulation 28B provides for coordination where the corporate debtor is itself a corporate guarantor;
Regulation 30A has been substituted to require applications for withdrawal under Section 12A of the IBC to be filed within 3 (three) days of the CoCs’ approval. The application must be accompanied by a bank guarantee or demand draft towards the estimated CIRP costs and may be filed only after the constitution of the CoCs and before the invitation for expression of interest is issued;
Regulation 36(2) has been amended to insert a new clause (jb), requiring the information memorandum to include details of any asset of a personal guarantor or corporate guarantor proposed to be transferred under Section 28A, including its description, value, and proposed mode of transfer;
new sub-regulations 39(3C) and 39(3D) have been inserted. Regulation 39(3C) requires the resolution professional to file a prescribed form for the purposes of the proviso to Section 31(1) of the IBC (two-stage approval of resolution plans). Regulation 39(3D) provides that in case of multiple resolution plans, at least one of the resolution plans will provide for resolution as a going concern;
Regulation 39(4) has been amended to extend the timeline for filing the compliance certificate from 15 (fifteen) days to 30 (thirty) days after the approval of the resolution plan by the CoCs;
the model timeline under Regulation 40A has been revised, with the latest timeline for Regulation 39(4) (compliance certificate filing) reduced from T+165 to T+150; and
new Regulations 40E and 40F have been inserted. Regulation 40E permits the CoCs, by a 66% voting share, to seek dissolution of the corporate debtor during CIRP where the assets are insufficient to meet CIRP or liquidation costs or cannot be effectively realised. Regulation 40F provides for restoration of the CIRP before a liquidation order is passed.

Pursuant to the amendments, IBBI has also issued a circular dated June 2, 2026, specifying the revised formats for various forms relating to the CIRP, including public announcements, written consent forms, proof of claims, withdrawal applications, invitation for expression of interest, 2 (two) stage approval applications, and compliance certificates.

Key takeaway: IBBI has introduced enhanced disclosure requirements and procedural reforms for the CIRP, including detailed disclosure requirements for operational creditors, a new framework for transfer of guarantor assets, revised withdrawal procedures under Section 12A of the IBC, 2 (two) stage approval of resolution plans, extended compliance certificate filing timelines, and a mechanism for dissolution of the corporate debtor during CIRP where assets are insufficient.

IBBI (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) (Amendment) Regulations, 2026

IBBI, vide notification dated June 1, 2026, has amended the IBBI (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019, introducing enhanced asset disclosure requirements, strengthened coordination between resolution professionals, and updated procedural requirements. Some of the key amendments are as follows:

a new Regulation 6A has been inserted, requiring every application under Sections 94 and 95 of the IBC to be accompanied by a complete and true statement of assets. The disclosure must cover 12 (twelve) categories of assets, including cash and bank deposits, business interests and commercial assets, domestic and overseas investments, immovable property, retirement and provident fund assets, digital assets, intellectual property and intangible rights, valuable movable assets, agricultural assets and livestock, receivables and advances, claims and contingent assets, and employee stock option plans or beneficial ownership interests;
the statement of assets must include assets owned directly or indirectly, jointly held assets, assets held in a fiduciary capacity, assets held through beneficial ownership structures, and any assets over which the individual exercises control or derives an economic benefit (irrespective of legal title);
a new Regulation 11A has been inserted to facilitate coordination between the resolution professional of the personal guarantor and the resolution professional of the corporate debtor in relation to asset transfers during the CIRP, for the purposes of Section 28A of the IBC; and
references to prescribed Forms A, B and C have been replaced with “such form as notified by the Board through circular”, and the earlier forms have been omitted.

Key takeaway: IBBI has introduced enhanced asset disclosure requirements for personal guarantor insolvency proceedings, requiring a complete statement of assets covering 12 (twelve) categories including digital assets, and established coordination requirements between resolution professionals of personal guarantors and corporate debtors for asset transfers under Section 28A of the IBC.

IBBI (Bankruptcy Process for Personal Guarantors to Corporate Debtors) (Second Amendment) Regulations, 2026

IBBI, vide notification dated June 1, 2026, has amended the IBBI (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019, introducing a framework for coordinating asset transfers between bankruptcy and corporate insolvency proceedings. Some of the key amendments are as follows:

Regulation 10(3)(h) has been amended to include a reference to Section 164A of the IBC, expanding the disqualification criteria applicable to bankruptcy trustees; and
a new Regulation 20A has been inserted to facilitate the transfer of assets under Section 28A of the IBC. The provision requires the bankruptcy trustee to coordinate with the resolution professional of the corporate debtor, obtain the approval of the CoCs for the proposed transfer, and ensure the required disclosures under Regulation 7 and Section 155 of the IBC.

Key takeaway: IBBI has introduced a framework for coordinating asset transfers between bankruptcy and corporate insolvency proceedings under Section 28A of the IBC, requiring bankruptcy trustees to coordinate with resolution professionals and obtain CoC approval for proposed transfers.

IBBI (Voluntary Liquidation Process) (Second Amendment) Regulations, 2026

IBBI, vide notification dated June 1, 2026, has amended the IBBI (Voluntary Liquidation Process) Regulations, 2017. The amendments strengthen the claims submission and communication framework and introduce a mechanism for the termination of voluntary liquidation proceedings. Some of the key amendments are as follows:

a new Regulation 28A has been inserted, requiring every person claiming to be a stakeholder to submit its claim on or before the last date specified in the public announcement. Stakeholders are also required to update their claims if they receive full or partial satisfaction of the claim from any source after the liquidation commencement date;
Regulation 29 has been amended to require the liquidator to record written reasons for rejecting any claim and to communicate the decision admitting or rejecting the claim to the stakeholder within 7 (seven) days; and
a new Regulation 42 has been inserted to provide a framework for the termination of voluntary liquidation proceedings under Section 59(5A) of the IBC. The resolution for termination must set out the reasons for termination, the treatment of liquidation costs, and a declaration that the termination will not adversely affect any stakeholder. The liquidator is also required to submit a report to the Adjudicating Authority confirming compliance with the prescribed process and the solvency of the corporate person. Upon termination, the appointment of the liquidator stands terminated and no further action is required under the regulations.

Key takeaway: IBBI has strengthened the claims submission framework for voluntary liquidation, requiring stakeholders to submit claims by the specified deadline and update claims upon receiving satisfaction. A new termination framework under Section 59(5A) of the IBC permits termination of voluntary liquidation proceedings subject to prescribed conditions.

IBBI (Liquidation Process) (Fourth Amendment) Regulations, 2026

IBBI, vide notification dated June 1, 2026, has amended the IBBI (Liquidation Process) Regulations, 2016. The amendments introduce significant changes to the governance framework, timelines, and procedural requirements applicable to the liquidation process. Some of the key amendments are as follows:

the definition of ‘committee’ has been substituted to refer to the CoC, replacing the earlier concept of the consultation committee throughout the regulations;
a new Regulation 3A has been inserted requiring the CoC, by a vote of at least 66% of the voting share, to recommend a liquidator from the IBBI panel before the liquidation order is passed;
Regulation 4 has been substituted to introduce a revised fee structure for liquidators based on the amounts distributed, with the applicable fee reducing progressively over the course of the liquidation process;
Regulation 8 has been substituted to provide that the CoC constituted during the CIRP will continue to function during liquidation. Secured creditors who do not relinquish their security interest will not be part of the CoC. The liquidator is also required to present the actual liquidation costs, the consolidated status of legal proceedings, and the progress of the liquidation process at every CoC meeting;
a new Regulation 8A has been inserted to facilitate asset transfers under Section 28A of the IBC. The liquidator of a corporate guarantor must coordinate with the resolution professional, obtain CoC approval for the proposed transfer, and make the required disclosures in the progress report and asset memorandum;
a new Regulation 8B has been inserted permitting the CoC, by a vote of at least 66%, to apply to the Adjudicating Authority for the replacement of the liquidator;
Regulation 30 has been substituted to require the liquidator to verify claims within 7 (seven) days of receipt and communicate the admission or rejection of claims, along with reasons, within a further 7 (seven) days. Claims that have already been verified during the CIRP are not required to be re-verified; and
key timelines are shortened, including reducing the time for submission of claims and relinquishment of security interests to 14 (fourteen) days, verification of claims to 7 (seven) days, and the overall liquidation period from one year to 180 (one hundred and eighty) days.

Pursuant to the amendments, IBBI also issued a circular dated June 2, 2026, specifying the revised formats for liquidation proceedings, including forms for written consent to act as liquidator, public announcement, progress reports, security interest intimation, compliance certificates, and deposit of unclaimed dividends.

Key takeaway: IBBI has introduced significant governance and timeline reforms for the liquidation process, including substitution of the consultation committee with the CoC, a revised fee structure for liquidators, CoC recommendation of liquidators, asset transfer coordination under Section 28A, CoC voting for replacement of liquidators, and shortened key timelines including reduction of the overall liquidation period from 1 (one) year to 180 (one hundred and eighty) days.

IBBI (Grievance and Complaint Handling Procedure) (Amendment) Regulations, 2026

IBBI, vide notification dated June 1, 2026, has amended the IBBI (Grievance and Complaint Handling Procedure) Regulations, 2017. Some of the key amendments are as follows:

the definition of ‘service provider’ has been substituted to align with the broader definition under Section 3(31A) of the IBC, replacing the earlier definition that listed specific categories of regulated entities; and
the prescribed Form A, which set out the format for filing complaints against service providers, has been omitted from the Regulations.

IBBI has also issued a circular dated June 3, 2026, specifying the revised format for filing complaints.

Key takeaway: IBBI has streamlined the complaint filing framework by aligning the definition of ‘service provider’ with Section 3(31A) of the IBC and omitting the earlier prescribed Form A for filing complaints against service providers.

Comprehensive valuation guidelines to enhance consistency and transparency

IBBI, vide circular dated June 15, 2026, has issued guidelines for conducting valuation under the IBC. The guidelines aim to standardise valuation practices, strengthen documentation requirements, and improve the consistency and transparency of valuation reports. Some of the key provisions under the guidelines are as follows:

registered valuers are required to maintain comprehensive documentation, including working papers, communications, alternative valuation methodologies considered, risks identified, and supporting records that substantiate the valuation conclusions;
valuation reports must contain 23 (twenty-three) minimum disclosures, covering matters such as the scope and purpose of the valuation, details of the valuer, conflict disclosures, valuation approaches, basis and premise of value, assumptions, caveats, and the valuation report identification number;
standardised formats have been prescribed for the valuation of land and buildings, plant and machinery, and securities or financial assets. These formats require, among other things, an executive summary, details of the valuation approaches adopted, inspection findings, sustainability considerations, and supporting annexures;
specific parameters have been prescribed for valuing receivables, including the nature of the receivable, the credit risk profile and related party status of the debtor, ageing analysis, legal enforceability, supporting documentation, historical recovery trends, and relevant macroeconomic factors;
the duties of registered valuers towards the designated coordinating valuer have been clarified. The registered valuers are required to provide timely assistance, share relevant information and data, maintain supporting working papers, and ensure that all information provided is true, correct, and complete; and
a coordinating valuer framework has been introduced to determine the fair value of the corporate debtor on an integrated basis. The framework requires the coordinating valuer to consider asset-level valuations together with synergistic value, business synergies, future cash flows, intangible assets, and industry outlook, rather than simply aggregating individual asset value.

Key takeaway: IBBI has issued comprehensive valuation guidelines to standardise valuation practices, requiring registered valuers to maintain comprehensive documentation, prescribing 23 (twenty-three) minimum disclosures in valuation reports, standardised formats for valuation of different asset classes, and introducing a coordinating valuer framework to determine fair value on an integrated basis.

MoF update

Foreign Exchange Management (Non-debt Instruments) (Third Amendment) Rules, 2026

MoF, vide notification dated June 12, 2026, has amended the Foreign Exchange Management (Non-debt Instruments) Rules, 2019. Some of the key amendments are as follows:

the heading of Chapter V, ‘Investment by Non-Resident Indian or an Overseas Citizen of India’, is substituted with ‘Investment by an Individual Person Resident Outside India including a Non-Resident Indian or an Overseas Citizen of India’;
Rule 12(1) is substituted to permit an individual person resident outside India to purchase or sell, on a repatriation basis, equity instruments of a listed Indian company and other securities under Schedule III. Prior Government approval is required where such investment results in transfer of ownership or control to entities or citizens of countries sharing a land border with India, or where the beneficial owner is a citizen of such country;
Rule 13 is amended to permit an individual person resident outside India holding equity instruments or units on a repatriation basis to transfer the same by way of sale or gift to another person resident outside India, subject to applicable Government approval requirements;
Schedule II is amended to clarify that the total holding of a FPI, including through an investor group, must remain below the prescribed individual limit. Investments of 10% or more are to be treated in accordance with the provisions applicable to foreign direct investment;
Schedule III is amended to prescribe that the holding of any individual person resident outside India must remain below 10% of the paid-up equity capital of a listed Indian company on a fully diluted basis, while the aggregate holding of all such individuals must not exceed 24%; and
Schedule III further provides that any breach of the 10% limit must be rectified through divestment within 5 (five) trading days from the date of settlement of the trades causing the breach, failing which the entire investment will be treated as foreign direct investment, in which case the investor cannot make any further portfolio investment in the concerned company. The investor must also notify the depositories and the concerned company through the designated AD branch within 7 (seven) trading days of settlement of the trades causing the breach. Notably, any breach of the aggregate or sectoral limit during the period between the acquisition and sale or conversion to foreign direct investment within the prescribed time will not be treated as a contravention under these rules.

Key takeaway: MoF has amended the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, permitting all individual persons resident outside India (not only NRIs and OCIs) to invest in equity instruments of listed Indian companies on repatriation basis, subject to a 10% individual limit and 24% aggregate limit. Any breach of the 10% limit must be rectified through divestment within 5 (five) trading days, failing which the investment will be treated as foreign direct investment.

JSA updates

RBI announces special swap facilities for ECBs and OFCBs

Pursuant to the announcement made upon conclusion of the 61^st meeting of the Monetary Policy Committee, RBI, vide notification dated June 8, 2026, has introduced a concessional USD-INR forex swap facility for the following loans:

ECBs availed by eligible public sector undertakings with a minimum average maturity of at least 3 (three) years; and
OFCBs availed by AD category-I banks with a minimum maturity of 3 (three) years.

This swap facility will be open until January 15, 2027, for eligible external commercial borrowings drawn down by eligible public sector undertakings and overseas foreign currency borrowings raised by AD category-I banks, up to December 31, 2026.

For a detailed analysis, please refer to the JSA Prism of June 12, 2026.

RBI permits bank financing for Real Estate Investment Trusts and streamlines lending guidelines for Infrastructure Investment Trusts

On June 10, 2026, RBI issued the RBI (Commercial Banks – Credit Facilities) Third Amendment Directions, 2026, amending the RBI (Commercial Banks – Credit Facilities) Directions, 2025 to introduce a formal framework for bank lending to Real Estate Investment Trusts and revise the existing framework for Infrastructure Investment Trusts. Effective October 1, 2026, the amendments seek to broaden access to bank financing for trust-based investment vehicles while imposing prudential safeguards on eligibility, leverage, security, repayment structures, and end-use monitoring.

For a detailed analysis, please refer to the JSA Prism of June 16, 2026.

IBBI (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2026

On June 8, 2026, IBBI notified the IBBI (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2026 to amend the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The amendments have introduced key regulations aimed at value maximisation, enhanced creditor participation, transparency and accountability in the CoC’s decision making and streamlined cost assessment and approval mechanisms in corporate insolvency resolution processes.

For a detailed analysis, please refer to the JSA Prism of June 17, 2026.

This Newsletter has been prepared by: