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Consider the following statements regarding Insolvency and Bankruptcy Board of India (IBBI):
- It has regulatory oversight over the insolvency professional entities.
- Its members are appointed by the Reserve Bank of India (RBI).
Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
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Consider the following statements regarding Insolvency and Bankruptcy ...
The Insolvency and Bankruptcy Board of India (IBBI) has now mandated that Resolution Professionals (RPs) provide a copy of its report to both creditor and debtor in all cases.
About Insolvency and Bankruptcy Board of India (IBBI):
- The IBBI was established on October 1, 2016 in accordance with the provisions of the ‘Insolvency and Bankruptcy Code, 2016’.
- It is responsible for the implementation of the IBC. The IBC amends and consolidates the laws relating to the insolvency resolution of individuals, partnership firms, and corporate persons in a time-bound manner.
- The IBBI regulates professionals as well as processes.
- It has regulatory oversight over the insolvency professional agencies, insolvency professional entities, insolvency professionals, and information utilities.
- It enforces rules for processes of corporate insolvency resolution, individual insolvency resolution, corporate liquidation, and individual bankruptcy under the IBC.
- It has also been designated as the ‘Authority’ under the Companies (Registered Valuers and Valuation Rules), 2017 for the regulation and development of the profession of valuers in the country.
- Constitution of the Board: The Board consists of the following members who are appointed by the Central Government:
- A Chairperson.
- Three members from among the officers of the Central Government equivalent or not below the rank of a Joint Secretary. Out of the three members, each will represent the Ministry of Finance, the Ministry of Corporate Affairs, and the Ministry of Law, ex -officio.
- One member nominated by the RBI (Reserve Bank of India), ex-officio.
- Five other members nominated by the Central Government, out of which at least three should be whole-time members.
- The term of office of the Chairperson and members (other than ex-officio members) is five years or until they attain sixty-five years, whichever is earlier, and they are eligible for re-appointment.
Hence only statement 1 is correct.
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Consider the following statements regarding Insolvency and Bankruptcy ...
Understanding the IBBI
The Insolvency and Bankruptcy Board of India (IBBI) plays a crucial role in the insolvency and bankruptcy framework in India. Let's analyze the given statements:
Statement 1: Regulatory Oversight over Insolvency Professional Entities
- Correctness: This statement is true.
- Explanation: The IBBI has the authority to regulate insolvency professionals, insolvency professional agencies, and information utilities. It ensures that these entities adhere to the provisions of the Insolvency and Bankruptcy Code (IBC) and maintains the integrity of the process.
Statement 2: Members Appointed by the Reserve Bank of India (RBI)
- Correctness: This statement is false.
- Explanation: The members of the IBBI are not appointed by the RBI. Instead, the Board consists of members appointed by the central government. The IBBI's composition includes representatives from various sectors, ensuring a diversified approach to insolvency and bankruptcy matters.
Conclusion
Based on the analysis, only the first statement is correct. Therefore, the correct answer to the question is option 'A':
- 1 only is accurate, while 2 only is incorrect.
This distinction is crucial for understanding the governance structure of the IBBI and its role in regulating insolvency practices in India.
The Insolvency and Bankruptcy Board of India (IBBI) plays a crucial role in the insolvency and bankruptcy framework in India. Let's analyze the given statements:
Statement 1: Regulatory Oversight over Insolvency Professional Entities
- Correctness: This statement is true.
- Explanation: The IBBI has the authority to regulate insolvency professionals, insolvency professional agencies, and information utilities. It ensures that these entities adhere to the provisions of the Insolvency and Bankruptcy Code (IBC) and maintains the integrity of the process.
Statement 2: Members Appointed by the Reserve Bank of India (RBI)
- Correctness: This statement is false.
- Explanation: The members of the IBBI are not appointed by the RBI. Instead, the Board consists of members appointed by the central government. The IBBI's composition includes representatives from various sectors, ensuring a diversified approach to insolvency and bankruptcy matters.
Conclusion
Based on the analysis, only the first statement is correct. Therefore, the correct answer to the question is option 'A':
- 1 only is accurate, while 2 only is incorrect.
This distinction is crucial for understanding the governance structure of the IBBI and its role in regulating insolvency practices in India.
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