Corporate insolvency set-up to be fully functional by 31 March

The corporate insolvency and bankruptcy system would be fully functional by 31 March 2017, says MS Sahoo, chairman of the bankruptcy regulator, Insolvency and Bankruptcy Board of India.

Though the system has started working from 1 December 2016, there are still some parts -- finalising regulations of information utilities and voluntary liquidations -- which are yet to be completed and the board expect to put these things in place by 31 March.

"The applications are being filed since 1t December, 2016. About 30 such applications have been filed.  While the resolution transactions have started from December 2016, it would take some time for these transaction to mature for liquidation process. The corporate resolution and liquidation framework needs two more elements to be complete. The first is the regulations for information utilities for which draft regulations have been uploaded on the website seeking public comments. (The deadline for public comment on the regulations has been over). The second is the regulations for fast track corporate insolvency resolution process (CIRP) and voluntary corporate liquidation," says MS Sahoo.

Public comments on the draft regulations for information utilities would be processed and sent to the advisory committee. The board will have its meeting in the middle of March and it is likely to issue the regulations on information utilities by 31 March.

Information utilities would be store houses of all the information about debt transactions.
By the end of December, 2016, five regulations relating to insolvency professional agencies (IPAs), insolvency professionals (IPs), corporate insolvency resolution process (CIRP) and corporate liquidation process were notified. These enabled registration of IPAs from 28 November, 2016 and registration of IPs from 30 November, 2016. By the end of December, 2016, there were three IPAs and 977 IPs.
 
IPAs would enrol, monitor, educate and train the insolvency professional. Insolvency professionals, on the other hand, would take over the management of an insolvent debtor in and prepare a resolution plan.

However, the board is yet to start working on the regulations governing individual bankruptcy. According to Sahoo, the board would start working on the individual bankruptcy system from April