1/30/2013

Role of BIFR

MONIRBA

Monirba {Allahabad university} Supported by Manish kanojia (MBA III sem} Presenter : Ritesh Pal 1 MBA (III rd sem.)

Agenda
1/30/2013

Introduction Objectives Process flow chart of BIFRs working Functions of operating agency under SICA BIFR organizational structure

MONIRBA

Facts and Figures

Constraints faced by BIFR Suggestions to make BIFR more effective Conclusion
2

Introduction
In the wake of sickness in the countrys industrial climate prevailing in the eighties, the Government of India set up in 1981, a Committee of Experts under the Chairmanship of Shri T.Tiwari to examine the matter and recommend suitable remedies therefore. Based on the recommendations of the Committee, the Government of India enacted a special legislation namely, the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) commonly known as the SICA
1/30/2013

The Board of experts named the Board for Industrial and Financial Reconstruction (BIFR) was set up in January, 1987 and functional with effect from 15th May 1987

MONIRBA

Objectives
To evaluate the techno-economic viability of sick industrial companies with a view to either rehabilitating them or to closing them down
To stop continued drain of public and private resources To protect employment as far as practicable
1/30/2013

MONIRBA

Process flow chart of BIFRs working

Enquiry Net worth positive through its own efforts It is in public interest to rehabilitate Preparation of techno-economic viability report Possibilities of merger or change of mgt. BIFR draws scheme of rehabilitation Consensus of parties called upon Fresh funds are released Advertisement inviting comments and objections Scheme is sanctioned by BIFR

1/30/2013 MONIRBA

Functions of operating agency under SICA

Conducting inquiry
Preparation of scheme Recommendation to BIFR Implementation of scheme Appointment of liquidator by high court To prepare list of assets, liabilities, shareholders - All books of accounts, registers, maps, plants, records, documents of title or ownership of property
1/30/2013 MONIRBA

1/30/2013 MONIRBA

Facts & Figures

1/30/2013

Year wise performance List of operating agencies Registration of PSUs No. of cases registered (state wise) No. of cases registered (industry wise) Filing of reference

MONIRBA

Constraints and Problems

Delay in submission of reports by operating agencies Lack of prompt and final response in matters of relief and concessions

1/30/2013 MONIRBA

Reluctance on the part of banks and FIs

Prolonged delay from promoters side Appeals registered with the AAIFR against BIFR Several appeals against BIFR in High Courts

Suggestions to make BIFR more effective

One time settlement of existing dues Substituting weak promoters by strong and resourceful promoters Concessional interest rates where time resorted is less
1/30/2013 MONIRBA

Sale of units by BIFR instead of passing winding orders to be implemented by High Courts Restriction over addition of new units unless the earlier ones are either closed after due scrutiny by BIFR or Rehabilitated Concurrence of majority of workers to be availed

10

Conclusion
1/30/2013

Once again, it will require lot of expertise and exposure to plan and extend counseling on all these areas. For this pooling of resources will be necessary. A tall order indeed, but there seems to be no shortcut.

11

MONIRBA

References:
Entrepreneurship and Small Business Management by M.B. Shukla www.bifr.in

12

1/30/2013 MONIRBA

13

1/30/2013 MONIRBA