The Insolvency and Bankruptcy Board of India (IBBI) has now mandated information utilities (IU) to use PAN or any other official document to verify the identity of users, who wish to seek information of corporate debtors.
The IU, under the Insolvency and Bankruptcy Code (IBC), is required to maintain an electronic database of information of any CD, with respect to records of its debt, balance sheet and cash flow statement, assets etc.
The IU allows its users (mainly creditors) to access real-time information of the CDs, to eliminate delays and disputes relating to claims and defaults. Earlier, the IBBI regulations didn’t make IUs to mandatorily verify the identity of its users.
Since the entire sharing of information and verification and authentication thereof is stipulated to be done through electronic mode by various agencies, the circular has been issued to make the mechanism more systematic and well defined to remove any gaps for making the entire database legally tenable before the adjudicating authorities, noted Jyoti Prakash Gadia, managing director at Resurgent India.
The other major amendment, introduced by the IBBI, is linked to marking different “status” of debt information submitted, that’s with respect to authentication/no authentication done by the debtor.
Earlier the “status” was only with respect to debt information submitted and not with default. Now as per the guidelines for both the debts, which are not under default or which are reported as defaulted, marking different kinds of status has been introduced, explained Daizy Chawla, managing partner, S&A Law Offices.
Overall, the amendments indicate a proactive and pragmatic approach of IBBI to make the mechanism more transparent with seamless procedures and processes, say experts.