INTRODUCTION

The Insolvency and Bankruptcy Code, 2016 which was enacted by the Indian Parliament to
consolidate and amend the existing laws relating to insolvency and bankruptcy in the country,
established the Insolvency and Bankruptcy Board of India (IBBI) in the year 2016. It is a very
essential and important board of the government.

The Insolvency and Bankruptcy Board of India (IBBI) is a very crucial authority. It oversees
both professions and transactions. IBBI is responsible for implementing the IBC and amending
legislation for insolvency resolution of corporate people, partnership companies, and individuals
in a timely way in order to maximize the worth of such a person’s assets.

Its main functions include registering insolvency professionals and insolvency professional
agencies, regulating the insolvency process, and promoting the development of an efficient
insolvency system in India.
The IBBI also encourages credit availability, entrepreneurship, and the balance of all
shareholders’ interests. The main agenda of the Insolvency and Bankruptcy Board of India
(IBBI) was to improve the bankruptcy regime of the country. The IBBI is the main pillar in the
implementation of the IBC.

Constitution of the board

The headquarter of the IBBI is at New Delhi, which is headed by the chairman of the board. All
the members of the board are appointed by the Central Government. The board in total consists
of 10 members.

 One of them is the chairperson of the IBBI.

 Another person is a member nominated by The Reserve Board of India (RBI), ex- officio.

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  Three members are officers of the Central Government who are equivalent or not below
the rank of a Joint Secretary. Each of these three members will represent the Ministry of
Law, Ministry of Finance, and Ministry of Corporate Affairs, ex-officio.
 The other five members are nominated by the central government, out of which at least
three should be working as whole-time members.
The term of office for the Chairperson and other members (other than the ex-officio members) is
five years or until they attain the age of sixty-five (65), whichever is earlier.

The re-appointment of the members is also eligible.

All the members of the board including the chairperson should be persons of ability, integrity,
and standing who have the capacity to deal with all the problems which relate to bankruptcy or
insolvency. And should also have special knowledge and experience in law, finance, economics,
accountancy, or administration.

ESTABLISHMENT
The Insolvency and Bankruptcy Board of India (IBBI) is a statutory body established on 1st
October, 2016 in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016
(Code). It is headquartered in New Delhi, having two offices, one at Mayur Bhawan, Connaught
Circus and the other at Jeevan Vihar, Parliament Street.
The IBBI is one of the key pillars of the ecosystem responsible for implementation of the Code.
It has regulatory oversight over the service providers in the insolvency ecosystem. It also has
responsibility to provide regulatory framework for insolvency resolution processes of corporates
and individuals, and to promote and develop working and practices of various institutions, in
furtherance of the objectives of the Code.
Though IBBI levies a fee on the service providers, it mostly depends on grants from Government
for its sustenance.

Features of the board

The Insolvency and Bankruptcy Board of India (IBBI), is a body corporate and has a perpetual
succession. IBBI also has a common seal and has the right to sue or be sued. The Insolvency and
Bankruptcy Board of India (IBBI) also has the powers subject to the provisions of the code, to
acquire, and dispose of property, and hold, both the movable and immovable.
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Powers and Functions of the Board

The Board exercises the powers and functions conferred to it under Section 196 of the IBC
which are as follows.

General Functions of the Board

The Board will perform all or any of the following functions subject to the general direction of
the Central Government:

 Register, renew, suspend, withdraw, cancel and specify the minimum eligibility
requirements for registering insolvency professionals, insolvency professional agencies
and information utilities

 Promote the development and regulate the practices and working of the insolvency
professionals, insolvency professional agencies, information utilities and other
institutions

 Levy charges or fees for carrying out the purposes of the IBC, including fees for
registration and renewal of the insolvency professional agencies, insolvency professionals
and information utilities

 Specify regulations and standards for the functioning of the insolvency professional
agencies, insolvency professionals and information utilities

 Lay down regulations on the minimum curriculum of the examination of the insolvency
professionals for their enrolment as members to the insolvency professional agencies

 Carry out inspections, investigations, monitor the performance and audit the functioning
of the insolvency professional agencies, insolvency professionals and information utilities
and pass the required orders for compliance with the provisions of IBC and the
regulations

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 Call for any records and information from the insolvency professional agencies,
insolvency professionals and information utilities

 Publish research studies, information, data and other information as specified by the
regulations

 Specify regulations on the manner of storing and collecting data by the information
utilities and providing access to such data

 Maintain and collect records and disseminate information relating to bankruptcy and
insolvency cases

 Constitute such committees as required, including the committees laid down under
Section 197 of IBC

 Promote best practices and transparency in Board governance.

 Maintain websites and other universally accessible necessary repositories of electronic

information

 Enter into a memorandum of understanding with other statutory authorities

 Issue necessary guidelines to the insolvency professionals, insolvency professional

agencies and information utilities

 Specify mechanism for redressal of grievances against the insolvency professionals,

insolvency professional agencies and information utilities and pass orders relating to the
complaints filed against them for compliance with the provisions of the IBC and the
regulations

 Specify mechanisms to issue regulations, including the conduct of public consultation

processes, before notifying any regulations

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  Make guidelines and regulations on matters relating to bankruptcy and insolvency
required under the IBC, including the mechanism for time-bound disposal of the assets of
the corporate debtor/debtor

Powers of the Board to Make Bye-Laws

The Board can make model bye-laws to be adopted by the insolvency professional agencies,
which may provide the following:

 The minimum standards of professional competence for the members of the insolvency
professional agencies

 The standards for the ethical and professional conduct of the members of the insolvency
professional agencies

 Requirements for enrolment of persons as members and granting membership of the

insolvency professional agencies in a non-discriminatory manner

 Setting up a governing board for management and internal governance of the insolvency
professional agency as per the regulations specified by the Board

 The required information that needs to be submitted by the members, including the time
and form for submitting such information

 The particular classes of persons to whom services will be provided at concessional rates
or for no remuneration by members

 The grounds and manner on which penalties can be levied upon the members of the
insolvency professional agencie.

 A transparent and fair mechanism for redressal of grievances against the members of the
insolvency professional agencies

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  The grounds under which the insolvency professionals can be expelled from the
membership of the insolvency professional agencies

 The procedure for enrolling persons as members, the quantum of fee and manner of
collecting fees for inducting persons as members of the insolvency professional agency

 The manner of conducting examination for the enrolment of insolvency professionals

 The manner of reviewing and monitoring the working of the insolvency professionals
who are members

 The duties and other activities that need to be performed by the members

 The manner of conducting disciplinary proceedings, imposing penalties and utilising the
amount received as penalties against its members and insolvency professionals

Powers of the Board as Vested under CPC

The Board may exercise the powers vested in a civil court under the Civil Procedure Code, 1908
(CPC) while exercising the powers under the IBC, at the time of trying a suit, in respect of the
following matters:

 The production and discovery of books of account and other documents, at such time and
place as specified by the Board

 Enforcing and summoning the attendance of persons and their examination on oath

 Inspection of any registers, books and other documents of any person at any place

 Issuing of commissions for examining documents or witnesses

Meetings of the Board

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The Board conducts meetings as per the provisions of the Insolvency and Bankruptcy Board of
India (Procedure for Governing Board Meetings) Regulations, 2017. The Board shall meet at
least four times a year and conduct at least one meeting in one quarter.

The Chairperson will preside at the Board meeting. If the Chairperson cannot attend the Board
meeting, the members present at the meeting can choose any other member to preside at the
meeting.

The Board meetings will be ordinarily held at the head office (New Delhi) of the IBBI. However,
the Chairperson and the members of the Board can also hold meetings at other offices of the
IBBI or any other place in India if they are of the opinion that it is expedient to do so.

The quorum of the Board meeting is five members when the Board consists of eight or more
members. The quorum is three members when the Board consists of less than eight members. All
questions that come up in any Board meeting will be decided by the majority votes of the present
and voting members. In the event of an equality of votes, the Chairperson, or in his absence, the
person presiding, will have a casting or second vote.

Advantages of IBBI
Some of the potential advantages of having such an agency include:

1. Improved legal framework for insolvency and bankruptcy:

The IBBI is responsible for implementing the IBC, which can help to ensure that insolvency and
bankruptcy proceedings are carried out in a fair and transparent manner.
2. Increased efficiency and speed in insolvency and bankruptcy proceedings:
The IBC and the regulations implemented by the IBBI are designed to streamline and expedite
the insolvency and bankruptcy process in India. This can help to ensure that insolvency and
bankruptcy proceedings are completed in a timely manner, which can benefit both creditors and
debtors.

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3. Improved credit culture in India:
The IBC and the IBBI’s regulations are intended to encourage a credit culture in India, where
creditors are more willing to lend and borrowers are more likely to repay their debts. This can
help to support the development of a healthy and functioning credit market in the country.

4. Greater transparency and accountability in insolvency and bankruptcy proceedings:

The IBBI is responsible for regulating the insolvency process and overseeing the conduct of
insolvency professionals. This can help to ensure that insolvency proceedings are conducted in a
transparent and accountable manner, which can help to build confidence and trust in the
insolvency system.

Disadvantages of IBBI
While the Insolvency and Bankruptcy Board of India (IBBI) has some potential advantages,
there may also be some disadvantages to having such an agency. Some potential disadvantages
of the IBBI include:

1. Potential for regulatory burden and compliance costs:

The IBBI is responsible for implementing the Insolvency and Bankruptcy Code (IBC) and
overseeing the insolvency process in India. This may involve the implementation of new
regulations and requirements, which could potentially create additional compliance costs and
administrative burdens for insolvency professionals and other stakeholders.

2. Limited ability to enforce regulations and sanctions:

The IBBI is an independent agency, but it does not have the power to enforce its regulations or
impose sanctions on individuals or firms that fail to comply with the IBC or the IBBI’s
regulations. This may limit the effectiveness of the IBBI in promoting compliance with the
insolvency and bankruptcy laws in India.

3. Potential for conflicts of interest:

The members of the IBBI are appointed by the central government, which may create potential
conflicts of interest if the government has a financial stake in the outcome of an insolvency or
bankruptcy proceeding. This could potentially undermine the fairness and impartiality of the
insolvency process.

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4. Limited scope of authority:
The IBBI’s authority is limited to overseeing and regulating the insolvency and bankruptcy
process in India. It does not have jurisdiction over other areas of the financial system, such as
banking, insurance, or securities markets. This may limit the agency’s ability to address broader
issues related to financial stability and market integrity.

Conclusion
In conclusion, the Insolvency and Bankruptcy Board of India (IBBI) plays an important role in
promoting entrepreneurship and facilitating the resolution of insolvencies in India.

The IBBI’s regulatory oversight helps ensure that insolvency professionals and information
utilities operate in a transparent and fair manner, which is essential for the smooth functioning of
the insolvency and bankruptcy process in India. This, in turn, helps protect the interests of all
stakeholders involved in the process, including creditors, debtors, and investors.

In addition, the IBBI’s efforts to promote public awareness of the insolvency and bankruptcy
laws and processes in India help encourage entrepreneurship and facilitate the resolution of
insolvencies in a timely and efficient manner. This helps foster a more conducive business
environment in India and ultimately benefits the economy as a whole.

Bibliography

 https://ibbi.gov.in/en/about/powers-functions

 https://lawbhoomi.com/insolvency-and-bankruptcy-board-of-india-ibbi/

 https://cleartax.in/s/insolvency-bankruptcy-board-india