BIFR full form is Board of Industrial and Financial Reconstruction. BIFR was an agency of the Government of India and a part of the Department of Financial Services of the Ministry of Finance. Board for Industrial and Financial Reconstruction (BIFR) was a board set up by the Government of India, in order to tackle the problem of industrial sickness, under the purview of Sick Industrial Companies.
It had been established as a quasi-judicial body in the Department of Economic Affairs, Ministry of Finance, for revival and rehabilitation of potentially sick undertakings and for closure/liquidation of non-viable and sick industrial companies.
History Of BIFR
- Industrial sickness began in India in the pre-independence days. In the beginning, the Indian government tried to counter it with some ad-hock measures including the Nationalization of Banks to provide temporary relief.
- In 1975, RBI set up the Tondon committee. After one year, HN Ray Committee was formed in 1976. These committees suggested some measures which were not satisfactory.
- In 1981, Tiwari Committee was constituted which suggested a comprehensive legislation to deal with the industrial sickness. Consequently, the SICA came into existence in 1985 and the BIFR was established in January 1987 under SICA.
- In April 1987, an Appellate Authority for Industrial and Financial Reconstruction (AAIFR) was formed and the Government companies were brought under the purview of SICA in 1991. Later, it covered both public and private companies that have industrial undertakings.
- In 2001, Companies (Amendment) Bill was introduced as the government felt that the BIFR didn?t meet its objectives of preventive industrial sickness.
- In 2003, the Sick Industrial Companies (Special Provisions) Repeal Act was enacted which replaced the SICA and sought to replace BIFR and AAIFR with National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT).
- On 1 December 2016 Government of India dissolved BIFR through an official notification and all proceedings were to be referred to the NCLT as per Insolvency and Bankruptcy Code.