The Reserve Bank of India and the Insolvency and Bankruptcy Board of India today signed a Memorandum of Understanding for mutual cooperation in implementation of the Insolvency and Bankruptcy Code.
The memorandum will allow for
- sharing of information and resources between the two, to the extent feasible and permitted by law,
- periodic meeting between the two to discuss matters of mutual interest such as regulatory requirements that impact each of their responsibilities in relation to the IBC and cases under it,
- cross training staff to utilise collective resources more effectively,
- capacity building of insolvency professionals and financial creditors,
- joint efforts towards enhancing the level of awareness among financial creditors about the importance and necessity of swift resolution of various types of borrowers in distress under the IBC.
The IBBI is implementing the IBC which provides for market-determined and time-bound resolution process.
In June last year, the RBI had identified 12 large accounts, which made up 25 percent of the banking system’s gross non performing assets, and asked banks to refer these for resolution under the IBC. It then came out with a second list with another 30-40 companies.