New Delhi: The Insolvency and Bankruptcy Board of India (IBBI) signed a Memorandum of Understanding (MoU) with the Reserve Bank of India (RBI) for effective implementation of the Insolvency and Bankruptcy Code and its allied rules and regulations, through a quick and efficient resolution process.
Furthermore, the two parties have agreed to assist and co-operate with each other for the effective implementation of the Code, subject to limitations imposed by the applicable laws.
The MoU, which was signed on the sidelines of the fourth meeting of the Insolvency Law Committee (ILC), provides for sharing of information between the two parties, subject to the limitations imposed by the applicable laws; sharing of resources available with each other to the extent feasible and legally permissible; and periodic meetings to discuss matters of mutual interest, including regulatory requirements that impact each party's responsibilities, enforcement cases, research and data analysis, information technology and data sharing.
The agreement also enforces cross-training of staff in order to enhance each party's understanding of the other's mission for effective utilisation of collective resources; capacity building of insolvency professionals and financial creditors; and joint efforts towards enhancing the level of awareness among financial creditors about the importance and necessity of swift insolvency resolution process of various types of borrowers in distress under the provisions of the Code.
The MoU was signed by Sudarshan Sen, Executive Director of the RBI and Dr. Mamta Suri, Executive Director of the IBBI in the presence of Injeti Srinivas, Secretary to the Government of India, Ministry of Corporate Affairs; Dr. M. S. Sahoo, Chairperson, IBBI and other members of the ILC.
For the unversed, the Insolvency and Bankruptcy Code, 2016 (Code) provides for reorganisation and insolvency resolution of corporate persons, partnership firms, and individuals in a time bound manner for maximisation of the value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders, and for this purpose, has created an institutional infrastructure comprising of adjudicating authorities, the IBBI, insolvency professionals, insolvency professional agencies and information utilities.
The IBBI exercises regulatory oversight over the insolvency professionals, insolvency professional agencies 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.