Insolvency and Bankruptcy Board of India (IBBI)

Insolvency and Bankruptcy Board of India (IBBI)

Part of: GS Prelims and GS-III – Economy

In News: 

• To address the difficulty faced by the lockdown due to COVID-19, the Insolvency and Bankruptcy Board of India (IBBI) amended the CIRP Regulations. 

Key takeaways:

• The Board provided that the period of lockdown imposed by the Central Government in the wake of COVID-19 outbreak shall not be counted for the purposes of the time-line for any activity that could not be completed due to the lockdown, in relation to a corporate insolvency resolution process. 
• This would be subject to the overall time-limit provided in the Code.

Important value additions:

The Insolvency and Bankruptcy Board of India

• It was established on 1st October, 2016 under the Insolvency and Bankruptcy Code, 2016. 
• It is a key pillar of the ecosystem.
• It is responsible for implementation of the Code. 
• The Insolvency and Bankruptcy Code consolidates and amends the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner. 

Corporate Insolvency Resolution Process (CIRP)

• It is a recovery mechanism for creditors. 
• If a corporate becomes insolvent, a financial creditor, an operational creditor, or the corporate itself may initiate CIRP.
• The CIRP may include necessary steps to revive the company. 
• CIRP in a case under Insolvency and Bankruptcy Code, 2016 (IBC) needs to be completed in 330 days including time taken for litigation.