BOARD OF INDUSTRIAL AND FINANCIAL RECONSTRUCTION Meaning and
Definition
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The Board of Industrial and Financial Reconstruction (BIFR) is a specialized regulatory body established in India under the Sick Industrial Companies (Special Provisions) Act of 1985. It is responsible for the rehabilitation and revival of sick industrial companies in the country.
The BIFR functions as a quasi-judicial body that plays a crucial role in the restructuring and revival of financially distressed companies. It primarily focuses on companies facing severe financial difficulties, such as those unable to meet their debt obligations or facing continuous losses. The board acts as a forum for these companies to present their case and seek assistance in financial restructuring and revival.
The BIFR possesses powers similar to a civil court and has the authority to investigate the financial conditions and management practices of a sick industrial company. Once an application is filed by a company, the BIFR reviews various aspects such as the state of the company’s affairs, reasons for its sickness, and potential plans for its rehabilitation. Based on this evaluation, the board may pass suitable orders for the restructuring, amalgamation, or winding-up of the company.
The BIFR consists of a chairperson and several other members, including representatives from various government agencies, industrial experts, and financial institutions. The board operates as an autonomous body and is under the supervision of the Ministry of Finance, Government of India. Its main objective is to ensure the revival and preservation of sick industrial companies and protect the interests of their stakeholders, including creditors, employees, and shareholders.
