What is the Insolvency and Bankruptcy Board of India (IBBI)?

About Insolvency and Bankruptcy Board of India (IBBI)

• The IBBI was established on October 1, 2016 in accordance with the provisions of the ‘Insolvency and Bankruptcy Code, 2016’.
• It is responsible for the implementation of the IBC. The IBC amends and consolidates the laws relating to the insolvency resolution of individuals, partnership firms, and corporate persons in a time-bound manner. 
  • The IBBI 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.
• It has also been designated as the ‘Authority’ under the Companies (Registered Valuers and Valuation Rules), 2017 for the regulation and development of the profession of valuers in the country.
• 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 the Central Government equivalent or not below the rank of a Joint Secretary. Out of the three members, each will represent the Ministry of Finance, the Ministry of Corporate Affairs, and the Ministry of Law, ex -officio. 
  • One member nominated by the RBI (Reserve Bank of India), ex-officio. 
  • Five other members nominated by the Central Government, out of which at least three should be whole-time members. 
  • The term of office of the Chairperson and members (other than ex-officio members) is five years or until they attain sixty-five years, whichever is earlier, and they are eligible for re-appointment.

Q1) What is Insolvency and Bankruptcy?

Insolvency is a financial state where a person cannot meet debt payments on time. Bankruptcy is a legal process that happens when the individual declares he or she can no longer pay back his or her debts to creditors.

Source: Equal access. Personal guarantors’ insolvency: IBBI mandates Resolution Professionals to provide reports to both debtor and creditor for enhanced transparency