Companies (Registered Valuers and Valuation) Amendment Rules, 2026 — MCA Mandates ₹25 Lakh Minimum Capital for RVOs
On June 1, 2026, the Ministry of Corporate Affairs (MCA) issued Gazette Notification G.S.R. 432(E), amending the Companies (Registered Valuers and Valuation) Rules, 2017 to introduce a mandatory minimum paid-up share capital requirement for Registered Valuers Organisations (RVOs). Published in the Official Gazette on June 3, 2026, these rules came into force on the date of publication.
The amendment substitutes clause (i) of sub-rule (1) of Rule 12 — the rule governing eligibility conditions for RVO recognition. The new clause adds a specific financial threshold: a minimum paid-up share capital of ₹25 lakh (twenty-five lakh rupees) as a mandatory precondition for RVO recognition. Existing RVOs that do not yet meet this requirement have been given a transition period, with full compliance required by March 31, 2028.
📋 Quick Summary — G.S.R. 432(E) | Companies (Registered Valuers and Valuation) Amendment Rules, 2026
📊 Key Numbers at a Glance
🏠 Background: What Are RVOs and Why Do They Matter?
When MCA notified the Companies (Registered Valuers and Valuation) Rules, 2017 on October 18, 2017, it created a two-tier framework for the valuation profession in India.
🌎 The Valuation Ecosystem — Two-Tier Structure Under the 2017 Rules
- Registered Valuers (RVs): Individual professionals registered with IBBI to conduct valuations under the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016 — across three asset classes: (1) Securities or Financial Assets, (2) Plant and Machinery, and (3) Land and Building
- Registered Valuers Organisations (RVOs): Section 8 not-for-profit companies recognised by IBBI as front-line regulators — they enrol aspiring valuers as members, deliver mandatory educational courses, refer candidates for the IBBI valuation examination, monitor valuation quality through peer review, and conduct disciplinary proceedings against errant members
No individual can become a Registered Valuer without first being a member of a recognised RVO. RVOs are therefore the critical gatekeepers of India's valuation profession — their institutional soundness directly determines the quality and credibility of valuations filed in M&A transactions, IBC proceedings, rights issues, related party transactions, and other regulated contexts.
The original Rule 12(1)(i) — unchanged since its substitution in the 2018 amendments — had no minimum financial requirement for an organisation seeking RVO recognition. This created a structural gap: an under-capitalised, resource-thin entity could technically be recognised as a front-line regulator of the profession. The 2026 amendment closes this gap.
📄 Original Rule 12(1)(i) — The Position Before June 3, 2026
Before this amendment, Rule 12(1)(i) read as a single continuous clause with three bundled conditions — none of which involved any financial threshold:
The three conditions embedded in the original clause were: (1) Section 8 / Section 25 company; (2) sole object of regulating valuers; and (3) bye-laws as per Annexure-III. No minimum paid-up capital was required. An RVO with even nominal share capital of ₹1 lakh technically met the structural eligibility test.
❌ The Gap in the Original Rule
- No minimum paid-up capital requirement — any level of capital sufficed for recognition
- No financial strength condition — under-resourced entities could qualify as front-line profession regulators
- Risk of proliferation of thinly-funded RVOs unable to properly discharge regulatory responsibilities — running examinations, peer review, disciplinary proceedings
- Inconsistency with the financial robustness expected of regulatory bodies governing a profession
✅ The Amendment — New Rule 12(1)(i): What Changed?
The 2026 amendment substitutes the entire clause (i) with a new, restructured provision. The new clause is split into three explicit sub-clauses — (a), (b), (c) — and critically adds the minimum paid-up capital condition as sub-clause (a):
(a) a minimum paid-up share capital of twenty-five lakh rupees;
(b) the sole object of dealing with matters relating to regulation of valuers of an asset class or asset classes; and
(c) bye-laws containing the requirements specified in Annexure-III:"
🔄 Before vs After — Side-by-Side Comparison
❌ Rule 12(1)(i) Before Amendment
- Section 8 / Section 25 company ✅
- Sole object of regulating valuers ✅
- Bye-laws as per Annexure-III ✅
- Minimum paid-up capital — NOT required ❌
- Single continuous clause — conditions bundled together
- No transition provisions
✅ Rule 12(1)(i) After Amendment
- Section 8 / Section 25 company ✅
- Sole object of regulating valuers ✅ [clause (b)]
- Bye-laws as per Annexure-III ✅ [clause (c)]
- Minimum paid-up capital ₹25 lakh — NOW REQUIRED ✅ [clause (a)]
- Three explicit sub-clauses (a), (b), (c) — clearer structure
- Transition proviso: existing non-compliant RVOs → March 31, 2028
📋 Provision-by-Provision Analysis
🔎 Rule 12(2) Functional Conditions — Unchanged
This amendment only modifies Rule 12(1)(i) — the structural eligibility conditions. The functional requirements under Rule 12(2) remain fully unchanged. These include: conducting IBBI-syllabus-aligned educational courses; granting membership to qualifying individuals; providing pre-certificate training; enforcing the Annexure-I code of conduct; arranging expert review of valuation reports; monitoring quality of valuation services; and providing a grievance and disciplinary mechanism. An organisation must satisfy both the amended Rule 12(1) structural conditions AND the unchanged Rule 12(2) functional conditions to receive RVO recognition from IBBI.
🕐 Amendment History — Companies (Registered Valuers and Valuation) Rules, 2017
Principal Rules Notified
Companies (Registered Valuers and Valuation) Rules, 2017 notified alongside commencement of Section 247 of the Companies Act, 2013. Established the RVO recognition framework, three asset classes, and IBBI as the Authority.
First Amendment
Procedural amendments to the principal rules.
Second Amendment
Amendments to valuer qualifications and examination provisions.
Third Amendment
Substituted Rule 12(1)(i) for the first time. Substantive changes to valuer eligibility and RVO framework.
Fourth Amendment
Further changes to valuer registration and RVO governance provisions.
2022 Amendment — Intimation Requirements Added
Inserted Rule 7A requiring Registered Valuers to intimate IBBI of changes in personal details, composition of partners or directors. Added intimation obligations for RVOs regarding changes in governing board composition. Amended Rule 8 proviso on valuation standards.
2026 Amendment — ₹25 Lakh Minimum Paid-Up Capital for RVOs
Substitutes Rule 12(1)(i) to add mandatory minimum paid-up share capital of ₹25 lakh as a new eligibility condition for RVO recognition. Provides transition period until March 31, 2028 for existing non-compliant RVOs.
💡 Why Has This Amendment Been Introduced? — The Rationale
📈 The Case for a Minimum Capital Threshold for Front-Line Regulators
RVOs are not passive bodies — they discharge active regulatory responsibilities requiring financial resources: delivering educational courses, verifying qualifications and experience, administering membership processes, conducting peer review through expert committees, addressing member grievances, and initiating disciplinary proceedings. A minimum ₹25 lakh paid-up capital requirement serves several clear purposes:
- Financial seriousness test: Signals genuine promoter commitment — a Section 8 company with ₹25 lakh paid-up capital has a level of institutional backing that a nominal-capital entity does not
- Operational capacity: Ensures the RVO can fund its regulatory functions — staff, technology, examinations, legal processes — without resource constraints that would compromise quality
- Regulatory consolidation: Encourages well-capitalised, well-governed RVOs rather than proliferation of thinly-funded bodies with limited capacity
- IBBI accountability: Financially robust RVOs can absorb compliance obligations, pay prescribed fees, and withstand regulatory scrutiny without organisational collapse
- Profession credibility: Valuers registered with properly capitalised RVOs carry greater credibility in high-stakes corporate and insolvency proceedings
🏢 Who Is Impacted and How?
Existing RVOs Below ₹25 Lakh Capital
Any currently recognised RVO with paid-up capital below ₹25 lakh must increase its capital before March 31, 2028 — via board resolution, fresh share allotment, ROC filing (PAS-3), and IBBI compliance reporting. Failure risks proceedings under Rule 17 and potential loss of recognition.
Aspiring New RVO Applicants
No transition period for new applicants. Any organisation applying for RVO recognition from IBBI on or after June 3, 2026 must demonstrate ₹25 lakh paid-up capital at the time of application, evidenced in the certificate of incorporation and MCA21 records.
Individual Registered Valuers
Not directly impacted. However, if their RVO fails to comply by March 31, 2028 and loses recognition, their membership status and continued professional practice could be disrupted. Valuers should monitor their RVO's compliance with this amendment.
IBBI (as the Authority)
Must verify existing RVOs' compliance via half-yearly reports, process new applications with the amended criteria, and track non-compliant existing RVOs against the March 31, 2028 deadline. IBBI may issue circulars on the transition process and verification mechanism.
Professional Institute-Backed RVOs
ICAI RVO, ICSI RVO, ICMAI RVO — backed by statutory professional institutes — are likely already above the ₹25 lakh capital threshold given their institutional support. For these, the amendment is a compliance confirmation exercise rather than a capital-raising challenge.
Companies Using Registered Valuers
Companies that engage Registered Valuers for mandatory valuations under the Companies Act are not directly impacted. The strengthened RVO framework indirectly benefits them by raising the floor for quality and governance standards in the valuation profession.
✅ What Must RVOs Do — Compliance Action Plan
📋 Step-by-Step Checklist for Existing Recognised RVOs
- Step 1 — Verify current paid-up capital: Check the paid-up share capital as reflected in the Register of Members, latest Form PAS-3 filed on MCA21, and the most recent audited balance sheet
- Step 2 — If below ₹25 lakh, plan capital augmentation now: Pass a board resolution authorising a fresh issue of equity shares. Section 8 company capital augmentation must be carefully structured — coordinate with your Company Secretary and statutory auditor
- Step 3 — File with MCA21: After allotment, file Form PAS-3 (return of allotment) with the Registrar of Companies and update the company's paid-up capital in MCA21 records
- Step 4 — Report compliance to IBBI: Furnish documentary evidence — updated ROC records, PAS-3 acknowledgement — to IBBI as part of regular half-yearly compliance reporting
- Deadline — March 31, 2028: All existing non-compliant RVOs must have ₹25 lakh paid-up capital in place and evidenced in MCA21 before this date
- Risk of non-compliance: Post-March 31, 2028, failure to comply may trigger Rule 17 proceedings by IBBI — which can lead to suspension or cancellation of RVO recognition, directly affecting all member Registered Valuers
📄 For New RVO Applicants — Immediate Compliance Required
No transition period applies to new applicants. From June 3, 2026 onwards, any organisation applying for RVO recognition from IBBI must show a minimum paid-up share capital of ₹25 lakh at the time of application — reflected in the certificate of incorporation or Form PAS-3 filing on MCA21. IBBI will treat this as a threshold eligibility condition before processing any application.
⚖ Legal Authority and Statutory Framework
📚 Frequently Asked Questions
Basic Questions
Compliance Questions
Conclusion
The Companies (Registered Valuers and Valuation) Amendment Rules, 2026 — G.S.R. 432(E) dated June 1, 2026 — is a targeted but structurally important reform. By inserting a ₹25 lakh minimum paid-up capital requirement into Rule 12(1)(i), the MCA has set a financial seriousness threshold for organisations that aspire to regulate India's valuation profession — bodies entrusted with front-line oversight of valuations filed in M&A transactions, IBC insolvency proceedings, rights issues, related party transactions, and dozens of other regulated contexts under the Companies Act, 2013.
The transition proviso giving existing RVOs until March 31, 2028 is a considered accommodation — it avoids immediate disruption to the valuation ecosystem while ensuring that all recognised RVOs meet a minimum standard of financial substance within a defined timeline. The restructured three-clause drafting of Rule 12(1)(i) also improves the clarity and readability of the eligibility framework for future applicants.
For all recognised RVOs: verify your paid-up capital position now, and if you fall short of ₹25 lakh, begin the capital augmentation process without delay. For aspiring new RVOs, the ₹25 lakh requirement is immediate and non-negotiable. The credibility of India's valuation profession depends on well-governed, financially sound organisations at its regulatory foundation.
