Insolvency and Bankruptcy Code (IBC) Explained
The Insolvency and Bankruptcy Code (IBC), 2016, is a consolidated law that provides a time-bound process for resolving insolvency of companies, partnerships and individuals.
The Insolvency and Bankruptcy Code (IBC), 2016, is a consolidated law that provides a time-bound process for resolving insolvency of companies, partnerships and individuals.
The process
When a company defaults, a corporate insolvency resolution process can be initiated before the National Company Law Tribunal (NCLT). A resolution professional manages the firm while creditors decide on a revival plan or liquidation.
Significance
The IBC shifted control from debtors to creditors and set strict timelines, helping address the problem of bad loans and improving the ease of doing business.
Why it matters for UPSC
The IBC's time-bound resolution, the NCLT and its role in tackling NPAs are commonly tested economic-governance facts.
Practise related UPSC PYQs
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Practise PYQs →Frequently asked questions
When was the Insolvency and Bankruptcy Code enacted?
In 2016.
Which tribunal handles corporate insolvency under the IBC?
The National Company Law Tribunal (NCLT).