Insolvency and Bankruptcy Board of India (IBBI)
Part of: GS Prelims and GS-III – Economy
- To address the difficulty faced by the lockdown due to COVID-19, the Insolvency and Bankruptcy Board of India (IBBI) amended the CIRP Regulations.
- 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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