New Delhi: Government has started the search process for the chairperson and three whole-time members of the Insolvency and Bankruptcy Board as it moves towards the implementation of a new law to make debt recovery process more effective.
The Board is being set up under the Insolvency and Bankruptcy Code, 2016 — approved by Parliament as well as notified by the government in May.
The Act consolidates and amends laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner.
The Corporate Affairs Ministry has sought applications for the posts of chairperson and three whole-time members.
They would have a tenure of five years or till they attain the age of 65 years, whichever is earlier.
Those applying for the posts should be “persons of ability, integrity and standing, who have shown capacity in dealing with problems relating to insolvency or bankruptcy and have special knowledge and experience in the field of law, finance, economics, accountancy or administration,” a public notice said.
Appointments to these positions would be made on the basis of recommendation from the selection committee chaired by the cabinet secretary.
Apart from a secretary level officer, three experts from the field of finance, law, management, insolvency and related subjects would be part of the panel. They would be nominated by the government.
The board would have ten people, including the chairperson.
There would be three ex-officio members, one person nominated by the Reserve Bank of India (RBI) and five people — including three whole time members — to be nominated by the central government.
Three ex-officio members would represent the Ministries of Finance, Corporate Affairs and Law. Only those officers at the level of joint secretary and above would be on the board.
A person joining as the chairperson can either opt for pay as admissible to a secretary in the government or get a consolidated monthly salary of Rs 4,50,000.
In the case of whole time members, they would have the choice to get pay as admissible to an additional secretary or take home a consolidated salary of Rs 3,75,000 per month.
Under the new law, employees, creditors and shareholders would have powers to initiate winding up process at the first sign of financial stress such as serious default in repayment of bank loan.
In case of insolvency, the legislation provides for paying the salaries of workers for up to 24 months from the liquidation of assets.