What is the Insolvency and Bankruptcy Code, 2016 (IBC)?

The Insolvency and Bankruptcy Code, 2016 (IBC) is the bankruptcy law of India which was passed by the Parliament in May 2016 to consolidate the existing framework for Insolvency and Bankruptcy by creating a single law. The IBC code is designed in a way such that it provides a one-stop solution for resolving insolvencies which previously used to be a long process. The code’s objective is to protect the interest of small investors and to make the process of doing business in India easy. Insolvency is a state when a person or company is unable to pay the money owned by them, and such cases are of two types- either Cash Flow or Balance sheet insolvency. The insolvency and Bankruptcy Board of India was formed on 1st October 2016 through the statutory powers under the IBC code 2016.
Why in news?
The Ministry of Corporate Affairs released the Achievements of IBC code 2016 on the official website of the Press India Bureau on Sunday, 15th December 2019.
Under achievements, the ministry mentioned that a total of 21,136 application have been filed to date since 2016 when the IBC code came into effect, out of which 9,653 cases involving amount approx Rs 3,74,931.30 crore have been disposed of at the pre-admission stage of IBC.
2,838 cases admitted into Corporate Insolvency Resolution Process (CIRP) out of which 306 cases are closed by appeal/withdrawn/review. A total of 161 cases worth Rs 1,56,814 crore were resolved.