Why this matters now

IBBI is tested for: T.K. Viswanathan Committee 2014 + Bharadwaj Committee 2015 recommended unified insolvency code; Insolvency and Bankruptcy Code (IBC) 2016 notified 28 May 2016; IBBI established 1 October 2016; key amendments 2018+2019+2020+2021; recoveries Rs 3.55+ lakh cr by IBC creditors (FY24); CIRP (Corporate Insolvency Resolution Process) avg 686 days (target 330 days); recent Cross-Border Insolvency Framework 2024 pending.

IBC 2016
Code
1 Oct 2016
IBBI established
Rs 3.55 lakh cr
IBC recoveries FY24
686 days
Avg CIRP

History

  • 1909: Provincial Insolvency Act + Presidency Towns Insolvency Act 1909.
  • 1956: Sick Industrial Companies (Special Provisions) Act — BIFR + AAIFR.
  • 2002: SARFAESI Act + Debt Recovery Tribunals strengthened.
  • 2014: T.K. Viswanathan Committee recommended unified insolvency code.
  • 4 Nov 2015: Bharadwaj Committee (Bankruptcy Law Reforms Committee) report.
  • 28 May 2016: Insolvency and Bankruptcy Code (IBC) 2016 notified.
  • 1 Oct 2016: IBBI established by GoI Notification.
  • 1 Dec 2016: CIRP regulations notified.
  • 2017: First major resolution — Essar Steel.
  • 2018: IBC Ordinance excluded promoters; pre-pack insolvency for MSMEs notified 2021.
  • 2019: Insolvency and Bankruptcy (Amendment) Act 2019 added Sec 12A withdrawals.
  • 2020-22: COVID suspension Sec 7+9+10 for Mar 2020-March 2021; cross-border insolvency framework draft 2022.
  • 2023: Pre-Pack Insolvency for MSMEs expanded.

Composition (Section 189)

IBBI Board: Chairperson + 3 whole-time members + 1 nominee MoF + 1 nominee MCA + 1 nominee RBI + 5 part-time members. Appointed by Central Government on Selection Committee recommendation. Term 5 years; up to age 65 (Chair) / 62 (members).

Functions (Sec 196 IBC): Register + regulate Insolvency Professionals (IPs), Insolvency Professional Agencies (IPAs), Insolvency Professional Entities (IPEs), Information Utilities (IUs); make regulations under IBC; specify CIRP standards; oversight + grievance.

Key actors:

  • IPAs (Insolvency Professional Agencies): 3 IPAs — ICAI, ICSI, ICMAI.
  • IPs (Insolvency Professionals): ~4,800+ registered.
  • IUs (Information Utilities): National E-Governance Services Ltd (NeSL) is sole IU.
  • NCLT + NCLAT adjudicate.

IBC Recoveries (FY24)

Cumulative IBC progress as of March 2024:

  • 7,200+ CIRPs initiated; 1,000+ resolved (corp resolution plans).
  • Realisation: Rs 3.55 lakh crore = 31.85% of admitted claims (and 161% of liquidation value).
  • ~2,500 voluntary liquidations closed.
  • Avg CIRP completion time: 686 days (target 270+60 = 330 days).
  • Behavioural change: 28,000+ debt defaults settled BEFORE IBC admission (deterrent effect, biggest IBC success metric).
  • Pre-pack MSMEs: 23 admitted since April 2021.
  • Top sectors: Manufacturing 38%, Construction 19%, Real Estate 11%.

UPSC angle

Know IBBI — Insolvency and Bankruptcy Board of India; statutory regulator under SECTION 188 of IBC 2016; HQ NEW DELHI; HISTORY: 1909 Provincial Insolvency Act + Presidency Towns 1909, 1956 SICA BIFR+AAIFR, 2002 SARFAESI+DRTs; T.K. VISWANATHAN COMMITTEE 2014 recommended unified code, BHARADWAJ COMMITTEE 4 Nov 2015 (Bankruptcy Law Reforms Committee); INSOLVENCY AND BANKRUPTCY CODE (IBC) 2016 NOTIFIED 28 MAY 2016; IBBI ESTABLISHED 1 OCT 2016; CIRP regulations 1 Dec 2016; 1st major resolution Essar Steel 2017; 2018 Ordinance excluded promoters; Pre-pack insolvency MSMEs notified 2021; IBC Amendment 2019 Sec 12A withdrawals; COVID suspension Sec 7+9+10 March 2020-March 2021; cross-border insolvency framework draft 2022; COMPOSITION (Sec 189): Chair + 3 whole-time + 1 nominee MoF + 1 nominee MCA + 1 nominee RBI + 5 part-time; Term 5 yrs / 65 Chair / 62 members; FUNCTIONS (Sec 196): Register+regulate IPs+IPAs+IPEs+IUs, make regulations IBC, specify CIRP standards, oversight+grievance; KEY ACTORS: 3 IPAs ICAI+ICSI+ICMAI, ~4800+ IPs, NeSL sole IU, NCLT+NCLAT adjudicate; FY24 CUMULATIVE: 7200+ CIRPs initiated 1000+ resolved, REALISATION Rs 3.55 LAKH CR = 31.85% admitted claims (161% liquidation value), ~2500 voluntary liquidations, AVG CIRP 686 DAYS (target 330 days), 28000+ defaults settled BEFORE admission (deterrent), pre-pack MSMEs 23 admitted since April 2021; CHAIRPERSON RAVI MITAL Oct 2020 then Nidhi Singh Feb 2024.

Frequently asked questions

When was IBBI established?

On 1 October 2016 under Section 188 of the IBC 2016. HQ at New Delhi.

What was the IBC 2016?

The Insolvency and Bankruptcy Code 2016 — notified 28 May 2016 — unified India’s scattered insolvency laws into one time-bound code. Replaced SICA + BIFR.

What is CIRP?

Corporate Insolvency Resolution Process — target 270+60 days but avg ~686 days in practice. Run by Resolution Professional under IBBI oversight.

How much has IBC recovered?

By FY24 cumulative Rs 3.55 lakh crore = 31.85% of admitted claims / 161% of liquidation value. Biggest behavioural impact: 28,000+ debts settled BEFORE IBC admission.

NCLT →

IBC adjudicator.

IBC 2016 →

Code page.

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