IBBI Current Affairs
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The Insolvency and Bankruptcy Board of India (IBBI) signed Memorandum of Understanding (MoU) with Reserve Bank of India (RBI) for increased cooperation in effective implementation of insolvency law. The MoU was singed at time when authorities are working on ways to address huge amount of non-performing assets (NPAs) in banking sector.
The MoU provides for sharing of information, subject to limitations imposed by applicable laws and sharing of resources available with each other to extent feasible and legally permissible. It calls for periodic meetings to discuss matters of mutual interest, including regulatory requirements that impact IBBI and RBI’s responsibilities, enforcement cases, research and data analysis, information technology and data sharing.
It also provides for cross-training of staff in order to enhance each party’s understanding of other’s mission for effective utilisation of collective resources. It will help in capacity building of insolvency professionals and financial creditors. It calls for joint efforts between IBBI and RBI for enhancing level of awareness among financial creditors about importance and necessity of swift insolvency resolution process of various types of borrowers in distress under provisions of Insolvency Code, etc.
Insolvency and Bankruptcy Code, 2016 (Code)
The Code provides for reorganisation and time -bound and market-determine insolvency resolution of corporate persons, partnership firms and individuals for maximization of value of assets. The IBBI exercises regulatory oversight over Insolvency Professionals, Insolvency Professional Agencies and Information Utilities. It frames and enforces rules for processes such as corporate insolvency resolution, individual insolvency resolution, corporate liquidation and individual bankruptcy under Code.
Both RBI and IBBI are interested in effective implementation of Code and its allied rules and regulations, through quick and efficient resolution process. Therefore, they agreed to sign MoU to assist and co-operate with each other for effective implementation of Code.
The Insolvency and Bankruptcy Board of India (IBBI) has notified regulations for inspection and investigation of service providers registered with it.
Under the Insolvency and Bankruptcy Code (IBC) implemented by IBBI, service providers are insolvency professional agencies, entities, professionals and information utilities.
The investigation authority has to serve a notice intimating the entity concerned about the probe at least 10 days in advance. However, this requirement can be done away with on grounds such as apprehensions that the records of the particular service provider might have been destroyed before the probe starts.
About Insolvency and Bankruptcy Board of India (IBBI)
IBBI is the regulator for overseeing insolvency proceedings of service providers like Insolvency Professional Agencies (IPA), Insolvency Professionals (IP) and Information Utilities (IU) in India. It was given statutory powers through the Insolvency and Bankruptcy Code. It functions under Ministry of Commerce.
The Code provides for a market-determined and time-bound resolution of insolvency proceedings. It became operational in December 2016. It covers Individuals, Companies, Limited Liability Partnerships and Partnership firms. It attempts to simplify the process of insolvency and bankruptcy proceedings and speed up the resolution process for stressed assets in the country.