Section 221 IBC: Grants by Central Government to IBBI
Section 221 of the Insolvency and Bankruptcy Code, 2016 authorises the Central Government, after the required Parliamentary appropriation, to provide grants to the Insolvency and Bankruptcy Board of India for the purposes of the Code.
Updated as on 30 September 2026.
Section 221 - Grants by Central Government
Section 221: The Central Government may, after due appropriation made by Parliament by law in this behalf, make to the Board grants of such sums of money as that Government may think fit for being utilised for the purposes of this Code.
Section 221 is contained in Chapter VII of Part IV of the Insolvency and Bankruptcy Code, 2016, which deals with finance, accounts and audit relating to the Insolvency and Bankruptcy Board of India. The provision establishes a statutory route through which the Central Government may fund the Board, subject to Parliamentary appropriation.
Meaning of important terms in Section 221
Central Government
The expression refers to the Central Government exercising its functions under the Insolvency and Bankruptcy Code, 2016. The Code is administered by the Ministry of Corporate Affairs for the Union Government.
The Board or IBBI
Under Section 3(1) of the Code, "Board" means the Insolvency and Bankruptcy Board of India established under Section 188(1). IBBI is the statutory regulator created under the Code and performs the powers and functions assigned to it, including those set out in Section 196.
Due appropriation made by Parliament
The words "after due appropriation made by Parliament by law" mean that a grant under Section 221 is subject to the constitutional and statutory process by which Parliament authorises expenditure of public money. Section 221 therefore does not itself operate as a standing authority to withdraw money from the Consolidated Fund of India without the required appropriation.
Purposes of the Code
A grant made under Section 221 must be utilised for the purposes of the Insolvency and Bankruptcy Code. The long title of the Code identifies its broad objects, including consolidation and amendment of insolvency and bankruptcy laws, time-bound reorganisation and insolvency resolution, maximisation of asset value, promotion of entrepreneurship and availability of credit, balancing stakeholder interests, and establishment of IBBI.
How Section 221 works
- Parliamentary appropriation comes first: the grant is expressly subject to due appropriation made by Parliament by law.
- The grant is discretionary: the Central Government may make grants in such sums as it considers fit.
- The recipient is IBBI: the statutory reference to the "Board" means the Insolvency and Bankruptcy Board of India.
- Use is purpose-limited: money granted under the provision is to be utilised for the purposes of the IBC.
Section 221 and the Board's Fund under Section 222
Section 221 should be read with Section 222 - Board's Fund. Section 222 establishes the Fund of the Insolvency and Bankruptcy Board. Among other receipts, grants received by the Board under the Code are credited to that Fund. The Fund is then applied for the purposes specified by Section 222, including expenditure connected with the Board and discharge of its statutory functions.
| Provision | Subject | Connection with Section 221 |
|---|---|---|
| Section 188 | Establishment and incorporation of IBBI | Identifies the statutory Board that receives grants under Section 221. |
| Section 196 | Powers and functions of the Board | Sets out major regulatory functions performed by IBBI under the Code. |
| Section 221 | Grants by Central Government | Permits grants to IBBI after Parliamentary appropriation for purposes of the Code. |
| Section 222 | Board's Fund | Provides for crediting grants, fees, charges and specified receipts to the Board's Fund and use of that Fund. |
| Section 223 | Accounts and audit | Provides the statutory framework for the Board's accounts and audit. |
Commencement and current status
Section 221 was brought into force with effect from 19 August 2016 by Central Government notification. The provision continues to form part of Chapter VII of Part IV of the Code. The Insolvency and Bankruptcy Code (Amendment) Act, 2026 made extensive changes to the IBC, but Section 221 itself continues with its existing statutory text.
Related financial provisions under the IBC
The surrounding provisions provide the wider financial and accountability framework for IBBI. Section 222 deals with the Board's Fund, while Section 223 deals with accounts and audit. The Code separately provides for the Insolvency and Bankruptcy Fund under Section 224, which should not be confused with the Board's Fund under Section 222.
Official legal resources
For the authoritative legislation and current regulatory material, refer to the Insolvency and Bankruptcy Code, 2016 on India Code and the IBBI Acts page. The wider current legal framework, including regulations, rules, notifications, circulars and guidelines, is available through the IBBI Legal Framework.