New IBBI Regulation: Information Utility to Verify Debtor’s Details Before Default Record Issuance [Read Notification]

The Insolvency and Bankruptcy Board of India ( IBBI ) has issued new amendments to the IBBI (Information Utilities) Regulations. It has inserted a new provision 21A mandating the verification of information before issuing the default record. The IBBI (Information Utilities) (Amendment) Regulations, 2024 will come into effect on October 1, 2024, with the exception of regulations 3 and 5, which will take effect on December 1, 2024. These amendments modify the IBBI (Information Utilities) Regulations, 2017 (referred to as ‘the principal regulations’). Specifically, in regulation 21, sub-regulation (2) is updated as follows: in clause (a), the time frame “the time specified in the Technical Standards” is replaced with “seven days,” and in clause (b), “three days” is replaced with “seven days.” This change will come into force on October 1, 2024. Get a Copy of Ready to Grow? Choose a Course That Fits Your Goals!, Click here Additionally, in regulation 21, sub-regulation (2), clause (c) is revised to replace sub-clause (iii) with a new sub-clause specifying that information should be submitted in Form C of the Schedule: (A) by financial creditors, which are banks listed in the Second Schedule of the Reserve Bank of India Act, 1934; and (B) by other creditors, concerning debtors other than corporate debtors as defined in section 3(8) of the Code. In sub-regulation (3), a new proviso is added after Table 2 stating that for financial creditors that are banks included in the Second Schedule of the Reserve Bank of India Act, 1934, if a debtor disputes part of the default amount or if the dispute involves only non-financial information, the information utility must record the status of authentication as ‘authenticated’ for the undisputed default amount. These changes will come into force on December 1, 2024. Get a Copy of Ready to Grow? Choose a Course That Fits Your Goals!, Click here In the principal regulations, existing regulation 21A regarding “Dissemination of public announcement” shall be renumbered as regulation 21B, and before regulation 21B so renumbered, the following regulation shall be inserted, namely: - “21A. Verification of information before issuance of a record of default. (1) An information utility shall verify the key details such as e-mail address of the debtor, document showing proof of debt, latest acknowledgment of debt by the debtor and proof of default before issuance of record of default in Form D of the Schedule under regulation 21.” In the amended regulation 21A of the principal regulations, which pertains to the ‘Verification of Information Before Issuance of Record of Default,’ new sub-regulations will be added after sub-regulation (1). These are: Sub-regulation (2): If a debtor disputes all or part of the default amount, the debtor must provide reasons for the dispute and upload supporting evidence. Sub-regulation (3): For financial creditors that are banks listed in the Second Schedule of the Reserve Bank of India Act, 1934, the information utility will issue a record of default with a status of ‘disputed’ for the amount under dispute, provided evidence of the dispute has been received and verified. For the remaining default amount, the record will be issued with a status of ‘authenticated.’ Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

New IBBI Regulation: Information Utility to Verify Debtor’s Details Before Default Record Issuance [Read Notification]

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New IBBI Regulation: Information Utility to Verify Debtor’s Details Before Default Record Issuance [Read Notification]

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