Section 212: Governing Board of Information Utility

Section 212 of the Insolvency and Bankruptcy Code, 2016 empowers the Insolvency and Bankruptcy Board of India to require every information utility to establish a governing board so that its governance takes account of the objectives of the Code. The number of independent members is governed by regulations made by IBBI.

Text of Section 212

The Board may, for ensuring that an information utility takes into account the objectives sought to be achieved under this Code, require every information utility to set up a governing board, with such number of independent members, as may be specified by regulations.

Meaning and Purpose of Section 212

Section 212 is a governance provision for information utilities regulated under the Code. It enables IBBI to require an information utility to have a governing board and authorises the regulatory framework to prescribe the required number of independent members.

An "information utility" is defined in Section 3(21) of the Code as a person registered with the Board as an information utility under Section 210. Information utilities perform regulated functions connected with financial information and the core services contemplated by the Code.

Role of the Governing Board

The governing board is intended to support proper institutional governance of an information utility. Section 212 expressly links the governing board requirement to the objectives sought to be achieved under the Insolvency and Bankruptcy Code. The detailed composition, eligibility and governance requirements are prescribed through the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017, as amended from time to time.

Independent Members

The Code does not itself state a fixed numerical requirement for independent members. Instead, Section 212 authorises IBBI to specify the number through regulations. Accordingly, the current Information Utilities Regulations should be consulted for the applicable composition and independence requirements of the governing board.

Regulatory point: Section 240(2) of the Code specifically empowers the Board to make regulations concerning the number of independent members under Section 212. The statutory provision and the current Information Utilities Regulations should therefore be read together.

Relationship With Other Information Utility Provisions

Section 209 requires an information utility to operate under and in accordance with a certificate of registration issued by the Board.
Section 210 deals with registration, renewal, suspension and cancellation of the certificate of an information utility.
Section 211 provides an appeal to the National Company Law Appellate Tribunal against an order of the Board made under Section 210.
Section 212 addresses the governing board and independent-member requirement.
Sections 213 to 216 deal with core services, obligations, submission of financial information, and rights and obligations concerning submitted information.

Current Regulatory Framework

The Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017 provide the detailed regulatory framework applicable to information utilities. Because these regulations are amended from time to time, the latest consolidated regulations and amendment notifications available on the official IBBI legal framework should be checked before relying on governance requirements for compliance or professional advice.

Official Legal Resources

For the current Code, Information Utilities Regulations, amendments, circulars and technical standards, refer to the official IBBI legal framework.

IBBI - Insolvency and Bankruptcy Code IBBI - Legal Framework IBBI - Circulars