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 "What is IBC, IBC Definition, IBC News, Insolvency and Bankruptcy Code (1)")
IBC
About IBC
Insolvency and Bankruptcy Code (IBC) 2016 was implemented through an act of Parliament. It got Presidential assent in May 2016.
Centre introduced the IBC in 2016 to resolve claims involving insolvent companies.
The bankruptcy code is a one stop solution for resolving insolvencies, which previously was a long process that did not offer an economically viable arrangement. The code aims to protect the interests of small investors and make the process of doing business less cumbersome. The IBC has 255 sections and 11 Schedules.
IBC was intended to tackle the bad loan problems that were affecting the banking system.
The IBC process has changed the debtor-creditor relationship. A number of major cases have been resolved in two years, while some others are in advanced stages of resolution.
It provides for a time-bound process to resolve insolvency. When a default in repayment occurs, creditors gain control over debtor’s assets and must take decisions to resolve insolvency. Under IBC, debtor and creditor both can start 'recovery' proceedings against each other.
Companies have to complete the entire insolvency exercise within 180 days under IBC. The deadline may be extended if the creditors do not raise objections on the extension. For smaller companies, including startups with an annual turnover of Rs 1 crore, the whole exercise of insolvency must be completed in 90 days and the deadline can be extended by 45 days. If debt resolution doesn't happen the company goes for liquidation.
IBC was intended to tackle the bad loan problems that were affecting the banking system.
The IBC process has changed the debtor-creditor relationship. A number of major cases have been resolved in two years, while some others are in advanced stages of resolution.
It provides for a time-bound process to resolve insolvency. When a default in repayment occurs, creditors gain control over debtor’s assets and must take decisions to resolve insolvency. Under IBC, debtor and creditor both can start 'recovery' proceedings against each other.
Companies have to complete the entire insolvency exercise within 180 days under IBC. The deadline may be extended if the creditors do not raise objections on the extension. For smaller companies, including startups with an annual turnover of Rs 1 crore, the whole exercise of insolvency must be completed in 90 days and the deadline can be extended by 45 days. If debt resolution doesn't happen the company goes for liquidation.
Latest Updates on IBC
Strengthening IBC: Extend prepack to big companies, says industry
Both the finance minister and the economic survey have highlighted the success of IBC
Updated On : 26 Jul 2024 | 12:21 AM IST
Can improve recovery rate under IBC to 40%: IBBI chairperson to RPs
In accounting terms, a going concern entity is expected to survive and thrive for at least the next 12 months, even if it is going through insolvency proceedings
Updated On : 12 Jul 2024 | 9:09 PM IST
At 269, NCLT approves record resolutions under IBC in FY24: IBBI data
However, it is still taking 679 days on average to conclude the resolution process, as against the standard timeline of 330 days
Updated On : 16 May 2024 | 11:45 PM IST
NCLAT sets aside insolvency process against Dream 11 parent company
Section 10A deals with the suspension of initiation of insolvency process for any default arising on or after March 25, 2020, for a period of six months or extending to one year
Updated On : 19 Apr 2024 | 8:48 PM IST
Special Courts with sessions judges can try offences under IBC: SC
The High Court had observed that the objective of the legislature was not to burden a special court comprising a sessions judge with trials under the IBC
Updated On : 19 Apr 2024 | 8:36 PM IST
After making insolvency process creditor-driven, can IBC address the delays
Experts point out that though the IBBI data reflects a steady rise in the total number of insolvencies admitted, the year-on-year increase does not show a consistent trend
Updated On : 14 Apr 2024 | 9:14 PM IST
Reached settlement with Celestial Aviation, formalities remain: SpiceJet
SpiceJet informs NCLT of near resolution in dispute with aircraft lessor Celestial Aviation requested an adjournment to finalise the settlement process
Updated On : 26 Feb 2024 | 12:39 PM IST
A third of withdrawn insolvency processes fully settled, says IBBI
IBBI said that the credible threat of the code that a company may change hands has changed the behaviour of debtors
Updated On : 20 Feb 2024 | 11:04 PM IST
The post-May 2024 dilemma
Even if we have a majority government, economic performance will be sub-optimal without political consensus on reforms
Updated On : 31 Jan 2024 | 9:41 PM IST
Economic prospects
Interventions needed to support long-term growth
Updated On : 30 Jan 2024 | 9:44 PM IST
Battery maker IBC raises $35 mn to fund manufacturing expansion in India
Company says it is developing products are safe at high temperatures and have a longer life
Updated On : 18 Jan 2024 | 1:52 PM IST
IBC needs further changes for resolution of biz conglomerates: RBI Dy Guv
Swaminathan J, deputy governor, RBI said that very often business conglomerates have intricate corporate structure with inter-connected related-party relationships that add to the complexity
Updated On : 17 Jan 2024 | 11:52 PM IST
Resolve this: How India's insolvency process drags on, erodes asset value
Litigation tactics of corporate debtors and poor judicial infrastructure among reasons for delay
Updated On : 16 Jan 2024 | 3:41 PM IST
Here is the best of Business Standard's opinion pieces for today
Updated On : 16 Jan 2024 | 6:30 AM IST
A performance appraisal of IBC
Despite potential biases introduced by the Dosa approach in analysing its efficacy, the law appears successful in delivering on its key parameters
Updated On : 15 Jan 2024 | 9:55 PM IST
Learnings from IBC suggest need for 'some course correction': RBI chief Das
The IBC, which came into force in 2016, is a key legislation aimed at resolving stressed in a time-bound and market-linked manner
Updated On : 11 Jan 2024 | 6:14 PM IST
IBC yet to address resolution for insolvencies of group companies
Group insolvency remains an ill-defined area in the IBC. Here's why it needs a clear framework
Updated On : 01 Jan 2024 | 11:05 PM IST
IBBI forms panel of 787 professionals to expedite resolution process
This move by the insolvency regulator aims to avoid delays and preserve asset value amid rising stressed cases
Updated On : 28 Dec 2023 | 11:24 AM IST
MCA planning new portal to streamline IBC cases, boost transparency
The IBBI would also be able to keep track of the happenings in the NCLT through this portal
Updated On : 24 Dec 2023 | 11:03 PM IST
Government may implement 2-month asset freeze of airlines under insolvency
To prevent immediate repossession of aircraft by lessors after default, the government is contemplating a two-month moratorium rule for the aviation sector
Updated On : 20 Dec 2023 | 12:28 PM IST
