BIFR FULL FORM IN BANKING

In this article you get to know about BIFR full from and other different abbreviations of BIFR in various fields. BIFR full form refers to Board for Industrial and Financial Reconstruction

The Board for Industrial and Financial Reconstruction played a crucial role in reviving and rehabilitating financially distressed industrial companies. BIFR was established in 1987 under the Sick Industrial Companies Special Provisions Act. The primary objective of BIFR was to identify and address the issues faced by financially troubled companies and revive them. The BIFR played a significant role in dealing with the menace of sick industries that adversely affected the Indian economy.

Functioning of BIFR: The BIFR was constituted with a Chairman and other members, including representatives from the government, financial institutions, and industry experts. It had the authority to examine and determine whether a company was “sick” based on specific criteria like net worth erosion, accumulated losses, and non-operational status. Once a company was declared sick, the BIFR had the responsibility to recommend measures for its revival and rehabilitation. These measures could include financial assistance, restructuring of debts, and changes in management. BIFR decisions had the force of law and were binding on all concerned parties.

Challenges faced by BIFR: Despite its noble intentions, the BIFR faced several challenges in its functioning. One of the significant challenges was the delay in decision-making, which resulted in companies deteriorating further during the evaluation process. There were also concerns about the lack of expertise and transparency in the decision-making process, leading to allegations of favoritism and corruption.

Impact of BIFR on the Indian Economy: During its existence, the BIFR made efforts to revive many sick companies and prevent their closure, saving jobs and assets. However, the overall impact on the Indian economy was not as significant as expected. The slow decision-making process and lack of efficient implementation hindered the success of BIFR in achieving its objectives fully.

Dissolution of BIFR and the Rise of Insolvency and Bankruptcy Code: Recognizing the limitations of BIFR, the Indian government introduced the Insolvency and Bankruptcy Code in 2016. The IBC aimed to provide a faster and more efficient resolution process for distressed companies. Under the IBC, a time-bound process was put in place, allowing the resolution of insolvency cases within a defined period, promoting a creditor-friendly approach.

Comparison between BIFR and IBC: The IBC streamlined the insolvency resolution process, making it more effective and efficient compared to the BIFR. The IBC empowered creditors and brought in a professional insolvency ecosystem with insolvency professionals, insolvency resolution professionals and insolvency professional agencies. This made the resolution process more transparent and accountable. Unlike the BIFR, the IBC focused on maximizing the value of distressed assets and ensured that viable companies were revived while non-viable ones were liquidated promptly. The clear distinction between revival and liquidation improved the chances of a successful resolution.

The Board for Industrial and Financial Reconstruction played a crucial role in addressing the issues faced by sick companies in India. Though it had some impact on reviving distressed entities, the overall effectiveness was limited due to various challenges. The BIFR’s dissolution marked the beginning of a new era with the implementation of the Insolvency and Bankruptcy Code and providing a more efficient and time bound resolution process.

Different abbreviations of BIFR in various fields are as follows

CONCLUSION:

Dear reader in this article you get to know about BIFR full from and BIFR term used in various other fields, If you have any query regarding this article kindly comment below.