Insolvency and Bankruptcy Code - Four Pillars
Q. A key innovation of the Insolvency and Bankruptcy Code is four pillars of institutional infrastructure. Which of the following are the pillars?
1) Insolvency Professionals
2) The Insolvency and Bankruptcy Board of India
3) Information Utilities- Published on 16 May 16a. 1, 3
b. 1, 2
c. 2, 3
d. All of the above
ANSWER: All of the above
- The first pillar of institutional infrastructure is a class of regulated persons, the ‘Insolvency Professionals’. They would play a key role in the efficient working of the bankruptcy process. They would be regulated by ‘Insolvency Professional Agencies’.
- The second pillar of institutional infrastructure is a new industry of `Information Utilities'. These would store facts about lenders and terms of lending in electronic databases. This would eliminate delays and disputes about facts when default does take place.
- The third pillar of institutional infrastructure is in adjudication. The NCLT will be the forum where firm insolvency will be heard and DRTs will be the forum where individual insolvencies will be heard. These institutions, along with their Appellate bodies, viz., NCLAT and DRATs will be adequately strengthened so as to achieve world class functioning of the bankruptcy process.
- The fourth pillar of institutional infrastructure is a regulator viz., ‘The Insolvency and Bankruptcy Board of India’. This body will have regulatory over-sight over the Insolvency Professional, Insolvency Professional agencies and information utilities.
