IBBI Amended the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017 to Strengthen Default Record Management and Verification Processes.
The Insolvency and Bankruptcy Board of India (IBBI) has issued the Insolvency and Bankruptcy Board of India (Information Utilities) (Amendment) Regulations, 2024, which amend the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017. These amendments, effective from 1st October 2024 for most provisions, introduce several changes aimed at enhancing the process of default record management and verification in insolvency proceedings.
Key Amendments:
Revised Time Frames for Submission:
Regulation 21(2)(a) and (b) of the principal regulations have been amended to extend the time frames for compliance from "the time specified in the Technical Standards" and "three days" to a uniform "seven days." This change aims to provide more time for the parties involved to adhere to regulatory requirements.
Updated Requirements for Default Records:
Regulation 21(2)(c) has been revised to specify that records of default in Form C must be submitted by financial creditors who are banks included in the second schedule of the Reserve Bank of India Act, 1934, as well as by other creditors for non-corporate debtors. This clarification ensures that the documentation for different types of creditors and debtors is properly categorized.
New Verification Process:
Regulation 21A introduces a new process for the verification of key details, including the debtor’s e-mail address, proof of debt, latest acknowledgement of debt, and proof of default before issuing a record of default. This aims to ensure that the records of default are accurate and reliable.
Handling Disputed Defaults:
The amended Regulation 21A(2) and (3) establish a procedure for handling disputes over default amounts. Debtors are required to provide reasons and evidence for any disputes. For financial creditors that are banks, the information utility will issue a default record with the status of "disputed" for contested amounts and "authenticated" for undisputed amounts. This provision ensures that disputes are recorded and managed appropriately.
Conclusion:
The amendments to the Information Utilities Regulations are designed to enhance the accuracy and efficiency of default record management in insolvency proceedings. By extending compliance time frames, clarifying submission requirements, and introducing rigorous verification processes, these regulations aim to streamline the handling of defaults and disputes, ultimately supporting a more transparent and reliable insolvency framework.
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