IBBI Establishment explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The Insolvency and Bankruptcy Board of India was established to oversee implementation of the Code. Sections 188 to 195 deal with its establishment and constitution, and Sections 196 to 198 with its powers and functions. It is a body corporate with perpetual succession and a common seal, with its main office in the National Capital Region.
The four pillars
| Institution | Sections |
|---|---|
| Insolvency and Bankruptcy Board of India (IBBI) | 188 to 198 |
| Insolvency Professional Agency (IPA) | 199 to 205 |
| Insolvency Professional (IP) | 206 to 208 |
| Information Utility (IU) | 209 to 216 |
Establishment — Section 188
- Established with effect from such date as the Central Government may notify.
- A body corporate with perpetual succession and a common seal, with authority to acquire, hold and dispose of property and to sue and be sued in its own name.
- Main office in the National Capital Region, with provision for additional offices across India.
- Consists of a chairperson and members appointed by the Central Government, all of whom must possess integrity and expertise in fields such as finance, law or administration.
Constitution — Section 189
- Chairperson.
- Three members from among officers of the Central Government, not below the rank of Joint Secretary or equivalent, representing the Ministry of Finance, the Ministry of Corporate Affairs and the Ministry of Law.
- One member nominated by the Reserve Bank of India, ex officio.
- Five other members nominated by the Central Government, with at least three being whole-time members.
Selection committee
Appointment of the chairperson and other non-ex officio members involves a selection committee comprising the Cabinet Secretary as chairperson, a Secretary to the Government of India nominated by the Central Government, the IBBI Chairperson for member selections, and three experts from fields such as finance, law, management and insolvency.
Term
Five years or until the age of 65, whichever comes first, with eligibility for reappointment. Salaries, allowances and service conditions are governed by the IBBI (Salary, Allowances and other Terms and Conditions of Service of Chairperson and members) Rules, 2016.
Removal — Section 190
The Central Government may remove a member who:
- is an undischarged bankrupt;
- has become physically or mentally incapable;
- has been convicted of an offence involving moral turpitude in the opinion of the Central Government; or
- has so abused his position as to render continuation in office detrimental to the public interest — with a reasonable opportunity of being heard.
Under Regulation 11 of the IBBI (Procedure for Governing Board Meetings) Regulations, 2017, a member must inform the Board as soon as possible on becoming subject to a Section 190 disqualification, and the Board must inform the Central Government if it comes to notice.
The dual role
The IBBI is a statutory body that regulates both the profession of insolvency professionals and the processes involved in insolvency resolution — a dual role described as making it unique among regulatory bodies in India.
It has regulatory oversight over insolvency professionals, insolvency professional agencies and information utilities, and it writes and enforces the rules for the processes themselves: corporate insolvency resolution, corporate liquidation, individual insolvency resolution and individual bankruptcy.
Most Indian regulators do one or the other. The IBBI does both, which is why its regulations reach into the conduct of a CIRP as directly as into the registration of the professional conducting it.
Powers and functions — Section 196
The IBBI establishment provisions create the body; Section 196 gives it work. The IBBI establishment and constitution provisions in Sections 188 to 195 should therefore be read alongside it.
- Registering insolvency professional agencies, insolvency professionals and information utilities, and renewing, withdrawing, suspending or cancelling those registrations.
- Promoting the development and regulation of practices among insolvency professionals and related institutions.
- Specifying eligibility criteria for registration and levying fees for registration and renewal.
- Establishing grievance mechanisms against insolvency professionals and agencies.
- Conducting periodic studies, research and audits on the functioning of registered entities.
- Creating regulations and guidelines, including on time-bound asset disposal processes.
Wherever the words "insolvency professional agencies, insolvency professionals and information utilities" occur, the words "service providers" are substituted.
The IBBI also conducts examinations and training programmes to enhance the skills of insolvency professionals.
Committees — Section 197
The Board may constitute an advisory committee, executive committees and such other committees as it deems fit, each with a chairperson and members specified by regulations.
Compliance checklist
- Read Sections 188 to 195 for constitution and 196 to 198 for powers.
- Note the five-year or age-65 term limit.
- Track the Section 190 disqualifications and the Regulation 11 self-reporting duty.
- Treat IBBI regulations as governing both professionals and processes.
- Note the substitution of "service providers" in Section 196.
Common mistakes
- Treating the IBBI as a professional body only, like a self-regulatory institute.
- Overlooking that three of the five nominated members must be whole-time.
- Assuming suspension or cancellation orders can be made by any member.