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Insolvency and Bankruptcy Board of India (IBBI)

  • IASbaba
  • March 31, 2020
  • 0
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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.

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