Mumbai: The Insolvency and Bankruptcy Board of India (IBBI) on Monday signed a memorandum of understanding (MoU) with the Reserve Bank of India (RBI) for enhancing cooperation between the two regulators to ensure better implementation of the Insolvency and Bankruptcy Code (IBC).
According to the MoU, RBI and IBBI will share data and resources with each other to the extent allowed by law and hold frequent discussions to overcome regulatory bottlenecks with respect to implementation of IBC.
While RBI is the banking regulator, the IBBI regulates insolvency professionals, insolvency professional agencies and information utilities. The IBBI writes and enforces rules for processes like corporate insolvency resolution, corporate liquidation, individual insolvency resolution and individual bankruptcy under IBC.
The two entities will also undertake joint efforts for capacity building of insolvency professionals and financial creditors.
Apart from data and resources sharing, the MoU provides for “periodic meetings to discuss matters of mutual interest, including regulatory requirements that impact each party’s responsibilities, enforcement cases, research and data analysis, information technology and data sharing, or any other matter that the parties believe would be of interest to each other in fulfilling their respective statutory obligations; cross-training of staff in order to enhance each party’s understanding of the other’s mission for effective utilisation of collective resources,” a press release by IBBI stated.
The MoU was signed by Sudarshan Sen, executive director of RBI, and Mamta Suri, executive director of IBBI, on the sidelines of the fourth meeting of the insolvency law committee headed by Injeti Srinivas, secretary, ministry of corporate affairs.
“Both the RBI and the IBBI are interested in the effective implementation of the code and its allied rules and regulations, through a quick and efficient resolution process. Therefore, they have agreed under the MoU to assist and co-operate with each other for the effective implementation of the Code, subject to limitations imposed by the applicable laws,” the release stated.
RBI and IBBI will also be working together to raise awareness among financial creditors about the necessity of swift resolution of firms in distress.