Insolvency and Bankruptcy Board of India[IBBI]: Duty, Function and Regulation

A Govt. of Indian  Statutory Institution

Unique regulator

The Insolvency and Bankruptcy Board of India was established on 1st October, 2016 under the Insolvency and Bankruptcy Code, 2016 (Code). It is a key pillar of the ecosystem responsible for implementation of the Code that consolidates and amends the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of the value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders.

The insolvancy board regulates a profession as well as processes. It has regulatory oversight over the Insolvency Professionals, Insolvency Professional Agencies, Insolvency Professional Entities and Information Utilities. It writes and enforces rules for processes, namely, corporate insolvency resolution, corporate liquidation, individual insolvency resolution and individual bankruptcy under the Code. It has recently been tasked to promote the development of, and regulate, the working and practices of, insolvency professionals, insolvency professional agencies and information utilities and other institutions, in furtherance of the purposes of the Code. It has also been designated as the ‘Authority’ under the Companies (Registered Valuers and Valuation Rules), 2017 for regulation and development of the profession of valuers in the country.

The Ministry of Corporate Affairs vide its notification dated 23rd October 2017 delegated
the powers and functions vested with it under section 247 of the Companies Act, 2013 and Companies (Registered Valuers and Valuation) Rules, 2017 to the Insolvency and Bankruptcy Board of India. Accordingly, the Insolvency and Bankruptcy Board of India is ‘authority’ for recognition of Valuer Organization and registration of Valuers.

Power and Function of the Board

Section 196. (1) The Board shall, subject to the general direction of the Central Government, perform all or any of the following functions namely:

(a) Register insolvency professional agencies, insolvency professionals and information utilities and renew, withdraw, suspend or cancel such registrations.

(aa) promote the development of, and regulate, the working and practices of, insolvency professionals, insolvency professional agencies and information utilities and other institutions, in furtherance of the purposes of this Code.

(b) Specify the minimum eligibility requirements for registration of insolvency professional agencies, insolvency professionals and information utilities.

(c) Levy fee or other charges for carrying out the purposes of this Code, including fee for registration and renewal of insolvency professional agencies, insolvency professionals and information utilities.

(d) Specify by regulations standards for the functioning of insolvency professional agencies, insolvency professionals and information utilities.

(e) Lay down by regulations the minimum curriculum for the examination of the insolvency professionals for their enrolment as members of the insolvency professional agencies.

(f) Carry out inspections and investigations on insolvency professional agencies, insolvency professionals and information utilities and pass such orders as may be required for compliance of the provisions of this Code and the regulations issued hereunder.

(g) Monitor the performance of insolvency professional agencies, insolvency professionals and information utilities and pass any directions as may be required for compliance of the provisions of this Code and the regulations issued hereunder.

(h) Call for any information and records from the insolvency professional agencies, insolvency professionals and information utilities.

(i) Publish such information, data, research studies and other information as may be specified by regulations.

(j) Specify by regulations the manner of collecting and storing data by the information utilities and for providing access to such data.

(k) Collect and maintain records relating to insolvency and bankruptcy cases and disseminate information relating to such cases.

(l) Constitute such committees as may be required including in particular the committees laid down in section 197.

(m) Promote transparency and best practices in its governance.

(n) Maintain websites and such other universally accessible repositories of electronic information as may be necessary.

(o) Enter into memorandum of understanding with any other statutory authorities

(p) Issue necessary guidelines to the insolvency professional agencies, insolvency professionals and information utilities.

(q) Specify mechanism for redressal of grievances against insolvency professionals, insolvency professional agencies and information utilities and pass orders relating to complaints filed against the aforesaid for compliance of the provisions of this Code and the regulations issued hereunder.

(r) Conduct periodic study, research and audit the functioning and performance of to the insolvency professional agencies, insolvency professionals and information utilities at such intervals as may be specified by the Board.

(s) Specify mechanisms for issuing regulations, including the conduct of public consultation processes before notification of any regulations.

(t) Make regulations and guidelines on matters relating to insolvency and bankruptcy as may be required under this Code, including mechanism for time bound disposal of the assets of the corporate debtor or debtor.

(u) Perform such other functions as may be prescribed.

(2) The Board may make model bye-laws to be to adopted by insolvency professional agencies which may provide for—

(a) The minimum standards of professional competence of the members of insolvency professional agencies.

(b) The standards for professional and ethical conduct of the members of insolvency professional agencies.

(c) Requirements for enrolment of persons as members of insolvency professional agencies which shall be non-discriminatory. Explanation.—For the purposes of this clause, the term “non-discriminatory” means lack of discrimination on the grounds of religion, caste, gender or place of birth and such other grounds as may be specified.

(d) The manner of granting membership.

(e) Setting up of a governing board for internal governance and management of insolvency professional agency in accordance with the regulations specified by the Board.

(f) The information required to be submitted by members including the form and the time for submitting such information.

(g) The specific classes of persons to whom services shall be provided at concessional rates or for no remuneration by members.

(h) The grounds on which penalties may be levied upon the members of insolvency professional agencies and the manner thereof.

(i) A fair and transparent mechanism for redressal of grievances against the members of insolvency professional agencies.

(j) The grounds under which the insolvency professionals may be expelled from the membership of insolvency professional agencies.

(k) The quantum of fee and the manner of collecting fee for inducting persons as its members.

(l) The procedure for enrolment of persons as members of insolvency professional agency.

(m) The manner of conducting examination for enrolment of insolvency professionals.

(n) The manner of monitoring and reviewing the working of insolvency professional who are members.

(o) The duties and other activities to be performed by members.

(p) The manner of conducting disciplinary proceedings against its members and imposing penalties.

(q) The manner of utilising the amount received as penalty imposed against any insolvency professional.

3) Notwithstanding anything contained in any other law for the time being in force, while exercising the powers under this Code, the Board shall have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, while trying a suit, in respect of the following matters, namely:—

(a) The discovery and production of books of account and other documents, at such place and such time as may be specified by the Board.

(b) Summoning and enforcing the attendance of persons and examining them on oath.

(c) Inspection of any books, registers and other documents of any person at any place.

(d) Issuing of commissions for the examination of witnesses or documents.

Members of the Insolvency Board

The terms and conditions of the service of the Chairperson are governed by IBBI (Salary, Allowances and other Terms and Conditions of Service of Chairperson and members) Rules, 2016.

LEGAL FRAMEWORK

Acts

Rules

18 Oct, 2017	The Companies (Registered Valuers and Valuation) Rules, 2017
30 Nov, 2016	The Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.
29 Aug, 2016	IBBI (Salary, Allowances and other Terms and Conditions of Service of Chairperson and Members) Rules, 2016

Regulations

Regulations

Circulars

Notifications under Insolvency and Bankrutpcy Code, 2016

Guidelines

Order, Rules and regulations by Other Authorities