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Institutional Infrastructure in the IBC The Processes proposed in IBC for individuals Fresh Start is a process by which individuals with debts lower than a specified amount (arrived at using NSSO and Planning Commission data) will have their debts written off, and be given a“fresh start”. Insolvency Resolution Process (IRP) will involve a process of negotiation between debtors and creditors, outside the court through the Resolution Professional (RP), leading up to a repayment plan. Discharge will be possible only as Bankruptcy procedure (BP) is a process led by the Adjudication Authority, once the IRP has failed. Discharge in the form of “discharge-from-bankruptcy 2 Institutional infrastructure • A private competitive industry of Information Utilities • A private competitive industry of Insolvency Professionals • Efficient and well functioning tribunals • An independent and well-governed regulator 3 Information Utilities • Other Committees views on credit information – Nachiket Mor • The vision: • Ubiquitious • Interoperable • Definitive • Low cost • Provisions in the IBC more limited •Impact beyond bankruptcy •Challenges in implementation: •Non cash transactions • Leakages / fraud • Cost 4 Insolvency Professionals • Significant reliance on the IP in all three processes: • Adjudicating authourity relies on IP’s report for eligibility for fresh start • In IRP: • Drives the formulation of the repayment plan by the debtor • Submits report to Adjudicating authourity • Calls meetings of creditors • Monitors the implementation f the repayment plan • In Bankruptcy: • Trustee administers the estate • Recommends discharge to the Adjudicating authourity 5 The challenges in implementation • Who will IPs be? • Loan agents? • Bank employees? • Local adminsitration? • Will involvement of local law enforcement be required? 6 Adjudicating Authority • Debt Recovery Tribunals – Geographic reach – Augment number and resources • Current resources abysmal • The vision: – FSTS – Harness role of technology 7 The Regulator • The Insolvency and Bankruptcy Board of India • Malleability of rules and regulations and processes • Consumer protection during insolvency / bankruptcy • Regulate IPs • Entry barriers, conduct, penalties • Regulate IUs • Access, accuracy,privacy • Governance of the IBBI 8 THANK YOU 9