Business Standard - Businesses that filed for liquidation after getting bankrupt saw a value erosion of 94% of the creditor claims, citing data from the Insolvency and Bankruptcy Board of India (IBBI). The bankruptcy framework was introduced in 2016. Since then, there have been 165 borrowers with claims of over Rs 1000 crore each. The total claims of these borrowers were worth Rs 6,94,000 crore. However, the on-ground valuation of the assets was just Rs 40,000 crore. Read more
The Insolvency and Bankruptcy Board of India, also known as IBBI, was established under the Insolvency and Bankruptcy Code, 2016 (IBC) on 1st October 2016.
It is responsible for the implementation of the IBC. The IBC amends and consolidates the laws relating to insolvency resolution of individuals, partnership firms and corporate persons in a time-bound manner.
Function - It regulates professionals as well as processes. It has regulatory oversight over the insolvency professional agencies, insolvency professional entities, insolvency professionals and information utilities.
It enforces rules for processes of corporate insolvency resolution, individual insolvency resolution, corporate liquidation and individual bankruptcy under the IBC.
The IBBI regulations aims to create a complete framework for the voluntary liquidation of any corporate person. The term corporate person includes any company incorporated under the Companies Act and includes limited liability partnership, or any other person incorporated with limited liability, but does not include any financial service provider.
Constitution of the board - The board consists of the following members who are appointed by the Central government:
A Chairperson
Three members from among the officers of Central Government equivalent are not below the rank of a Joint Secretary. Out of the three members, each will represent the Ministry of Finance, Ministry of Corporate Affairs and Ministry of Law, ex-officio.
One member nominated by the RBI, ex officio.
Five other members nominated by the Central Government, out of which at least three should be whole-time members.
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