Insolvency board to be functional from 1 December
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In a boost for the central government’s efforts to improve the ease of doing business, the Insolvency and Bankruptcy Board of India (IBBI) will become operational by 1 December, within six months of the related law being passed in Parliament.
According to a person familiar with the development, the 10-member IBBI will begin to execute its functions—regulating insolvency professionals and agencies and information utilities under the bankruptcy code—from December.
Earlier this week, the government notified final regulations for registration and model bye-laws for insolvency professionals and agencies. The regulations will come into effect on 29 November.
With this, the government will have initiated concrete measures to begin implementing the Insolvency and Bankruptcy Code.
Resolving insolvency is a key component of the ease of doing business rankings released by the World Bank each year. This year, India ranked 136 out of 190 countries under the resolving insolvency criterion.
IBBI chairman M.S. Sahoo said the board would become operational as soon as possible, without confirming the date.
At present, the IBBI has four part-time members—Ajay Tyagi, additional secretary, department of economic affairs; Amardeep Singh Bhatia, joint secretary, ministry of corporate affairs; G.S. Yadav, joint secretary, department of legal affairs; and A. Unnikrishnan, legal adviser, Reserve Bank of India.
The government is in the process of appointing five more members, including three full-time members.
The draft regulations for insolvency professionals and agencies and liquidation process were notified last month and put up for public comments. Earlier this month, IBBI held meetings to finalize the regulations to be notified under the bankruptcy code after taking stakeholders’ views into consideration.
During the consultation process on the regulations, bankruptcy experts and practitioners flagged various issues and concerns related to the appointment criteria and norms for the registration of insolvency professionals in the draft rules.
The final regulations have addressed industry concerns to a large extent, with significant changes to the draft rules.
The board is likely to notify the rules for insolvency resolution and liquidation process by the end of this month.