IBC Code

INSTITUTE - USB
DEPARTMENT - BBA
Bachelor of Business Administration
Subject Name- Banking
Subject Code- BAT-212
Faculty Name – Gagandeep Kaur (E6452)
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Topic – IBC Code 2016
IBC Code 2016
Course Objective
To deepen insights into practical applications of
Banking in a dynamic business environment.
Course Outcome
CO Title Level
Number
CO1 Remembering
Conceptual knowledge about Banking

structure and Indian financial system
CO2 Understanding
Comprehend the need, definition,
functions and economic significance of https://images.app.goo.gl/DB6c5LxrSnuyQcJr8
financial institutions and markets
2
Insolvency and Bankruptcy Code, 2016 (IBC)
• IBC,2016 is the bankruptcy law of India which seeks to
consolidate the existing framework by creating a single law
for insolvency and bankruptcy.
• The Insolvency and Bankruptcy Code, 2015 was introduced
in Lok Sabha in December 2015. It was passed by Lok Sabha
on 5 May 2016 and by Rajya Sabha on 11 May 2016. The
Code received the assent of the President of India on 28
May 2016.
3
Insolvency and Bankruptcy Code, 2016 (IBC)
• 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.
4
Features of IBC 2016
• Insolvency Resolution : The Code outlines separate insolvency
resolution processes for individuals, companies and partnership
firms. The process may be initiated by either the debtor or the
creditors.
• A maximum time limit, for completion of the insolvency resolution
process, has been set for corporates and individuals.
• For companies, the process will have to be completed in 180 days,
which may be extended by 90 days, if a majority of the creditors
agree. For start ups (other than partnership firms), small companies
and other companies (with asset less than Rs. 1 crore), resolution
process would be completed within 90 days of initiation of request
which may be extended by 45 days. 5
• Insolvency regulator: The Code establishes the Insolvency and
Bankruptcy Board of India, to oversee the insolvency
proceedings in the country and regulate the entities registered
under it. The Board will have 10 members, including
representatives from the Ministries of Finance and Law, and
the Reserve Bank of India.
• Insolvency professionals: The insolvency process will be
managed by licensed professionals. These professionals will also
control the assets of the debtor during the insolvency process.
6
• Bankruptcy and Insolvency Adjudicator: The Code
proposes two separate tribunals to oversee the process of
insolvency resolution, for individuals and companies:
(i) The National Company Law Tribunal for Companies and
Limited Liability Partnership firms
(ii) the Debt Recovery Tribunal for individuals and
partnerships
7
Procedure
• A plea for insolvency is submitted to the adjudicating
authority (NCLT in case of corporate debtors) by financial or
operation creditors or the corporate debtor itself.
• The maximum time allowed to either accept or reject the
plea is 14 days.
• If the plea is accepted, the tribunal has to appoint an
Interim Resolution Professional (IRP) to draft a resolution
plan within 180 days (extendable by 90 days). following
which the Corporate Insolvency Resolution process is
initiated by the court. 8
Procedure
• For the said period, the board of directors of the company
stands suspended, and the promoters do not have a say in
the management of the company.
• The IRP, if required, can seek the support of the company's
management for day-to-day operations.
• They may choose to revive the debt owed to debtors by
changing the repayment schedule or selling the assets of
the debtor to get their dues back.
• If the CIRP fails in reviving the company the liquidation
process is initiated. 9
REFERENCES
• Reference Books
1.Indian Banking – S. Natarajan and Dr. R Parameswaran – S Chand
Company and Ltd.
2.Introduction to Banking - Vijayaragavan Iyengar – Excel books
• Reference Website
• https://testbook.com/blog/history-of-banking-in-india/
• https://www.thebalance.com/what-is-banking-3305812
• https://groww.in/blog/the-evolution-of-banking-in-india/
10
Summary
• The Banking System plays vital role in the economic
development of the country. The banking sector has shown
tremendous growth in Indian Financial System from 18
century to till date. The Indian banking system comprises of
large no. of banking institutions, as discussed in Structure of
Indian Banking System, providing financial services mainly
financial assistance to the public or business houses
especially to the weaker sections of the country.
11
THANK YOU
For queries
Email: [email protected]

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INSTITUTE - USB

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