New Delhi, March 12: The Reserve Bank of India has signed a Memorandum of Understanding (MoU) with Insolvency and Bankruptcy Board of India (IBBI).For both of RBI and the IBBI is to have effective implementation of the Code and its rules and regulations of many debts, through a quick and efficient resolution process.
The Insolvency and Bankruptcy Code, 2016 provides for reorganization and insolvency resolution of corporate persons, partnership firms, and individuals in a time bound manner for maximization of the value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders.
To have a proper way of function, it has established 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.
The MoU is to make available for both such as:
(a) Sharing of information between the two parties, subject to the limitations imposed by the applicable laws.
(b) Sharing of resources available with each other to the extent feasible and legally permissible.
(c) 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.
(d) Cross-training of staff in order to enhance each party's understanding of the other's mission for effective utilization of collective resources.
(e) Capacity building of insolvency professionals and financial creditors.
(f) 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.