Sections 188 and 189 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.
Section 188 provides for the establishment of the Insolvency and Bankruptcy Board of India, from a date the Central Government appoints by notification, as a body corporate with perpetual succession and a common seal, with its head office in the National Capital Region. Section 189 says who sits on it, how members are selected and for how long they serve.
The article follows the IBBI consolidated text of the Code amended up to 12 August 2021 (the "consolidated text"). Part IV, which begins here, regulates insolvency professionals, agencies and information utilities.
The Board is established from a date the Central Government appoints by notification, as a body corporate with perpetual succession and a common seal. It consists of a Chairperson, three ex-officio members from the Ministry of Finance, the Ministry of Corporate Affairs and the Ministry of Law, one member nominated by the Reserve Bank of India and five other members nominated by the Central Government, at least three of them whole-time. Appointments other than ex-officio ones follow a selection committee. The term is five years or till sixty-five, whichever is earlier, with eligibility for reappointment.
Section 188: establishment and incorporation
Sub-section (1): establishment. "With effect from such date as the Central Government may, by notification, appoint, there shall be established, for the purposes of this Code, a Board by the name of the Insolvency and Bankruptcy Board of India." The date is for the Central Government to appoint; the text names none, and no notification is in the texts consulted, so this article states no date. If you need advice on how the Board's constitution bears on a proceeding or a registration, a legal consultation with our team can help you apply the text to your facts. Section 195 separately allows the Central Government, "until the Board is established", to designate a financial sector regulator to exercise the Board's powers and functions: see Sections 194 and 195 of this series.
Sub-section (2): body corporate. The Board "shall be a body corporate by the name aforesaid, having perpetual succession and a common seal, with power, subject to the provisions of this Code, to acquire, hold and dispose of property, both movable and immovable, and to contract, and shall, by the said name, sue or be sued."
| Feature | Words in the text |
|---|---|
| Legal personality | Body corporate by the name Insolvency and Bankruptcy Board of India |
| Continuity | Perpetual succession and a common seal |
| Property | Power to acquire, hold and dispose of property, movable and immovable, subject to the Code |
| Contracts and proceedings | Power to contract; sues or is sued by its name |
Sub-section (3): head office. "The head office of the Board shall be at such place in the National Capital Region, as the Central Government may, by notification, specify." The Explanation gives "National Capital Region" the meaning in clause (f) of section 2 of the National Capital Region Planning Board Act, 1985 (2 of 1985). The reader should check the current law for the corresponding provision of that Act. The place within the Region is for notification, and none is in the texts consulted.
Sub-section (4): other offices. "The Board may establish offices at other places in India." Offices elsewhere are a matter for the Board.
Section 189: constitution of the Board
Sub-section (1): the members. "The Board shall consist of the following members who shall be appointed by the Central Government, namely: –"
| Clause | Members |
|---|---|
| (a) | A Chairperson |
| (b) | Three members from amongst the officers of the Central Government not below the rank of Joint Secretary or equivalent, one each to represent the Ministry of Finance, the Ministry of Corporate Affairs and the Ministry of Law, ex-officio |
| (c) | One member to be nominated by the Reserve Bank of India, ex-officio |
| (d) | Five other members to be nominated by the Central Government, of whom at least three shall be the whole-time members |
That makes ten members in all on the text: the Chairperson, three officers, one nominee of the Reserve Bank of India and five others. The Ministries are named as printed. The text does not say which officer of each Ministry; it fixes only the rank.
Sub-section (2): qualifications. The Chairperson and other members "shall be persons of ability, integrity and standing, who have shown capacity in dealing with problems relating to insolvency or bankruptcy and have special knowledge and experience in the field of law, finance, economics, accountancy or administration."
Sub-section (3): selection committee. "The appointment of the Chairperson and the members of the Board other than the appointment of an ex-officio member under this section shall be made after obtaining the recommendation of a selection committee consisting of –"
| Clause | Member of the selection committee |
|---|---|
| (a) | Cabinet Secretary, Chairperson |
| (b) | Secretary to the Government of India to be nominated by the Central Government, Member |
| (c) | Chairperson of the Insolvency and Bankruptcy Board of India (in case of selection of members of the Board), Member |
| (d) | Three experts of repute from the field of finance, law, management, insolvency and related subjects, to be nominated by the Central Government, Members |
The Chairperson of the Board sits on the committee only "in case of selection of members of the Board", not when the Chairperson is selected. The Central Government appoints members, but the recommendation of the selection committee must be obtained first for all appointments other than ex-officio ones.
Sub-section (4): term. "The term of office of the Chairperson and members (other than ex-officio members) shall be five years or till they attain the age of sixty-five years, whichever is earlier, and they shall be eligible for reappointment." The text sets no limit on the number of reappointments, and nothing in this sub-section tells whether the age limit applies to a reappointed member differently.
Sub-section (5): salaries and terms. "The salaries and allowances payable to, and other terms and conditions of service of, the Chairperson and members (other than the ex-officio members) shall be such as may be prescribed." The amounts are left to be prescribed, and none are in the texts consulted.
A worked example
Suppose a vacancy arises among the five nominated members. Under section 189(1)(d) the Central Government nominates; under section 189(3) the appointment is made after the selection committee's recommendation, with the Cabinet Secretary as chair and the Chairperson of the Board as a member. The member named holds office for five years or until sixty-five, whichever is earlier, and may be reappointed (section 189(4)). A Joint Secretary of the Ministry of Law, who sits ex-officio under section 189(1)(b), is not subject to this selection or to the five-year term. The facts are invented.
Where the Board's powers are
The Board's powers and functions are in section 196: see Section 196. Removal of members, the Chairperson's powers and meetings are in Sections 190 to 193. The live post on the IBBI's establishment and constitution under sections 188 to 198 and the post on the Insolvency and Bankruptcy Board of India also cover this chapter.
Law around these sections
The Amendment Act, 2026 (No. 6 of 2026) has no clause that amends sections 188 or 189. It comes into force on the date or dates the Central Government notifies; the notification is not in the texts consulted, so check whether any change to a related provision, for example section 196, has been notified.
The salary and service conditions of members are left to rules, and no such rules on members' pay are described here. Amendments and notifications made after 12 August 2021, other than the Amendment Act, 2026, are not in the texts consulted and should be checked.
Need help understanding the regulator behind the Code?
Insolvency professionals, agencies, information utilities and their clients deal with the Board at registration, inspection and complaint stages. If you want a plain-language reading of how sections 188 and 189 fit your matter, speak to us through a legal consultation.
Key takeaways
- The Board is established from a date the Central Government appoints by notification; the text names no date.
- It is a body corporate with perpetual succession and a common seal, headquartered in the National Capital Region at a place to be notified.
- Members: a Chairperson, three ex-officio officers (Finance, Corporate Affairs, Law), one Reserve Bank of India nominee and five other nominated members, of whom at least three are whole-time.
- Non-ex-officio appointments follow a selection committee chaired by the Cabinet Secretary.
- Term: five years or till sixty-five, whichever is earlier; eligible for reappointment. Pay is as prescribed.
Read next
- Sections 190 to 193: removal of members, powers of the Chairperson and meetings of the Board
- Sections 194 and 195: vacancies, officers of the Board and designated financial sector regulator
- IBBI establishment and constitution under sections 188 to 198
- The Insolvency and Bankruptcy Board of India
Disclaimer: Based on the IBBI consolidated text of the Insolvency and Bankruptcy Code, 2016 amended up to 12 August 2021 and on the Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026), which comes into force on the date or dates notified by the Central Government, as consulted on 2 October 2026. It explains the words of the statute only; commencement notifications, other amendments made after 12 August 2021, notified thresholds, the rules and IBBI regulations, and the way tribunals and courts apply these sections should be checked. This article is general information, not legal advice; check the official text before acting.