Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017
Developing a legal framework for information utilities under the Insolvency and Bankruptcy Code
The Bankruptcy Law Reform Committee had recommended the formation and recognition of new class of entities known as ‘Information Utilities’ (IUs), for collecting and storing financial informing which could be utilized for efficient functioning of the Insolvency and Bankruptcy Code, 2016 (Code). It envisaged creation of a private competitive market for IUs. The core services rendered by the IUs are accepting electronic submission of financial information; safe and accurate recording of financial information; authenticating and verifying the financial information; and providing access to stored information to specified persons for facilitating smooth functioning of processes envisaged under the Code. The financial information recorded with the IUs can be relied on to ascertain existence of a default by a corporate person or an individual.
IUs are regulated by the Insolvency and Bankruptcy Board of India (IBBI).
The IBBI notified the Insolvency and Bankruptcy Board of India (IUs) Regulations, 2017 (IU Regulations) in 2017. The IU Regulations seek to create a competitive market for IUs and develop confidence in the services rendered by the IUs. They provide for the registration of IUs and among other matters, prescribe rules relating to shareholding, governance, and technical standards.
The IU Regulations are proving to be effective with the growing acceptance of the services rendered by them in the insolvency ecosystem. In 2017, the National E-Governance Services Limited, a union government company, registered as an IU with the IBBI. It serves as a depository of information pertaining to any debt or claim submitted by the financial or operational creditors and verified or authenticated by other parties.