The Insolvency and Bankruptcy Board of India (‘Board’), also known as IBBI, was established under the Insolvency and Bankruptcy Code, 2016 (‘IBC’) on 1st October 2016. It is responsible for the implementation of the IBC. The IBC amends and consolidates the laws relating to insolvency resolution of individuals, partnership firms and corporate persons in a time-bound manner.
The IBBI regulates professionals as well as processes. It has regulatory oversight over the insolvency professional agencies, insolvency professional entities, insolvency professionals and information utilities. It enforces rules for processes of corporate insolvency resolution, individual insolvency resolution, corporate liquidation and individual bankruptcy under the IBC.
Constitution of the Board
The Board consists of the following members who are appointed by the Central Government:
- A Chairperson.
- Three members from among the officers of the Central Government equivalent or not below the rank of a Joint Secretary. Out of the three members, each will represent the Ministry of Finance, Ministry of Corporate Affairs and Ministry of Law, ex -officio.
- One member nominated by the RBI (Reserve Bank of India), ex-officio.
- Five other members nominated by the Central Government, out of which at least three should be whole-time members.
The Chairperson and the other members should be persons of integrity, ability and standing, having the capacity to deal with problems relating to bankruptcy or insolvency and having special knowledge and experience in finance, law, accountancy, economics or administration.
The term of office of the Chairperson and members (other than ex-officio members) is five years or until they attain sixty-five years, whichever is earlier, and they are eligible for re-appointment.
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
- 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
- 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 agencies
- A transparent and fair mechanism for redressal of grievances against the members of the insolvency professional agencies
- 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
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.
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