The code came into existence back in 2016 and with it came a central regulatory body to control and regulate the matters of insolvency and bankruptcy. This code, the IBC produced this singular body so that every matter involving corporate insolvency can be solved within one roof. Throughout this article, we are going to look into the responsibilities of this regulatory body.
IBBI: The overseer
The primary function of IBBI (Insolvency and Bankruptcy Board of India) is to be the overseer over the matters concerned with insolvency and bankruptcy. These matters take the form of agencies, professionals, and processes. Let us take a closer look:
- The agencies: The agency is the Insolvency professional agencies. These agencies are the ones that provide insolvency resolution professionals to the NCLT in the time of need. The IBBI sees to it that these agencies are legit, the professionals that they provide are up to the task and they do have what it takes to take on the burden of Insolvency Resolution. The IBBI presents a set of rules that these IPA (Insolvency Professional Agencies) have to abide by, failing which leads to penalties.
- The professionals: It is the IBBI that conducts the examination associated with the appointment of Insolvency professionals (interim or otherwise). The process of appointment of such professionals is the one that demands proper examination, combined with the eligibility and the experience of the professionals. These professionals are the ones that are responsible for coming up with an insolvency resolution plan within a constrained time. Although the end result might lead to liquidation, one can always expect that maybe; just maybe the company can be revived. Therefore, the way to select a resolution professional is extra stringent.
- The processes: Insolvency resolution, as a process involves around a lot of financial information. The correctness, the frequency and the regularity at which this information is updated is the deciding factor how the insolvency resolution process would eventually lead: resolution or liquidation. Therefore, the IBBI has provided a centralized database through which the insolvency resolution professional can extract financial information in order to make sound decisions while planning the resolution process. This information utility is the very core of the reason as to the resolution process.
The board has 10 governing members, each of these members are the representatives of either one of the following bodies
- Ministry of Law
- Ministry of Finance
- Reserve Bank of India
This regulatory body covers the following entities:
- Limited Liability Partnerships
- Partnership Firms
- Individuals and
The advantages of this regulatory body can be counted among as their very function:
- Speedy resolution process
- Fast resolution of the stressed assets
- Providing different adjudicating authorities to attend to different matters.
The penultimate feature of the Insolvency and Bankruptcy Code, the IBBI is instrumental in creating a single playground on which the matters of insolvency resolution can be resolved.