Board for Industrial and Financial Reconstruction
 |
|
| Formation | 1987 |
|---|---|
| Extinction | 30 November, 2016 |
| Type | Governmental organisation |
| Legal status | Statutory |
| Purpose | Sick company remedies |
| Location |
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| Coordinates | 28°37′33″N 77°13′13″E / 28.625846°N 77.220299°ECoordinates: 28°37′33″N 77°13′13″E / 28.625846°N 77.220299°E |
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Region served
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India |
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Chairman
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Nirmal Singh |
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Parent organisation
|
Ministry of Finance |
| Website | www |
The Board for Industrial and Financial Reconstruction (BIFR) was an agency of the government of India, part of the Department of Financial Services of the Ministry of Finance. Its objective is to determine sickness of industrial companies and to assist in reviving those that may be viable and shutting down the others. But from 1 December 2016, by an official notification, Government of India dissolved it and all proceedings to be referred to the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) as per provisions of Insolvency and Bankruptcy Code.
The BIFR was established under The Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). The board was set up in January 1987 and became functional as of 15 May 1987. A new industrial policy was tabled in Parliament on 24 July 1991 aiming to maintain growth in productivity and gainful employment and to encourage the growth of entrepreneurship and upgrades to technology. That year the SICA was amended to include public sector enterprises in the board's purview.
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act of 2002 placed corporate debt outside the purview of the BIFR. By preventing reference to the BIFR, which had become a haven for the promoters of sick companies, the Act gives banks and financial institutions a better tool for recovering bad debt. It was complemented by the corporate debt restructuring package under which lenders and borrowers would meet to agree on a way of recasting stressed debt.
National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) would take over the functions of the BIFR and other bodies and speed up the process of winding down sick companies. The Companies (Amendment) Bill, 2001 was introduced because the government considered that the BIFR had not met its objective of preventing industrial sickness. The Sick Industrial Companies (Special Provisions) Repeal Act, 2003 replaced SICA and sought to dissolve the BIFR and the Appellate Authority for Industrial and Financial Reconstruction (AAIFR), replacing them by the NCLT and NCLAT. However, legal hurdles prevented the NCLT from being constituted.
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