Information Utilities
What are Information Utilities?
'Information Utilities' (IUs) are registered entities that are repositories for financial information. The functions of Information Utilities are to create and store information & accept submissions of financial information from persons, and publish such data or information and conform to other IUs.[1]
'Information Utilities' are registered under Section 210 of the Insolvency and Bankruptcy Code, 2016.[2]
What are the Objectives of the Information Utilities?
Information Utility is an institution with multiple objectives to provide undisputed information for the initiation of the insolvency process.[3] Information Utilities serves as a credit and contract Repository. Accept financial information from financial or operational creditors or debtors.
Financial information will be authenticated by all parties to the debt and stored for use as evidence in any legal process. Information Utilities is designed as a two-way communication tool between creditors and debtors for submission and authentication, with recording of disputes. Information Utilities are a Cost-effective tool for proof of borrower, borrowing, security interest and default.
What were the Recommendations from the Vishwanathan Committee?
The Vishwanathan Committee[4] recommended a strong base of information utilities to support efficient implementation by recognising that asymmetry of information is a critical barrier to fair negotiations, or ensuring swiftness of the process.[5] The Committee recommended the creation of this is to make available data or records information to stakeholders in resolving insolvency and bankruptcy.
The purpose of setting up an information utility under the Code is to bring the financial information about the debtors to one place and make it accessible to users.
NeSL- The first Information Utility
National E-Governance Services Ltd. is the first Information Utility set up under Section 210 of the Insolvency and Bankruptcy Code, 2016. It was incorporated as a central government company with an authorised paid-up capital of Rs. 30 Crores, with a larger no. of shareholders, including Banks and PSUs. These financial institutions are part of it, such as SBI, LIC, ICICI Bank, HDFC, Canara Bank, and NABARD.[6]
Its primary role is to store financial information of debt submitted by Financial or Operational Creditors. All parties connected to the debt verify and authenticate the information electronically on NeSL platform.[7]
Currently, there are a limited number of registered IUs in India, such as National E-Governance Services Limited (NeSL) and India Debt Resolution Company Ltd. (IDRCL), although only NeSL is fully operational as of now.[8]
What are the functions of Information Utilities?
Information Utilities help manage financial information in the insolvency process. They collect electronic records from creditors, debtors, and others, and store this data in a format that is easy to access.[9] This makes sure that important financial details are available when needed during cases like insolvency or debt resolution.[10]
They also check and verify the information they receive to make sure it is correct.[11] They provide access to this data to creditors, debtors, insolvency professionals, and legal authorities when required.[12]
One of their key roles is to create a record of default based on the verified information, which is necessary to start insolvency proceedings.[13]
References
- ↑ Insolvency and Bankruptcy Code, No. 31 of 2016, § 214, India Code (2016)
- ↑ Insolvency and Bankruptcy Code, No. 31 of 2016, § 3(21), India Code (2016).
- ↑ National E-Governance Services Ltd, What is an Information Utility, NeSL (last visited June 25, 2025), https://nesl.co.in/what-is-an-information-utility/.
- ↑ Bankruptcy Legal Reforms Committee set up under the chairmanship of Shri TK Vishwanathan in August, 2014.
- ↑ Chapter 3 - Economic Thinking, the Report of the Bankruptcy Law Reforms Committee, Vol I: Rationale and Design, November 2015.
- ↑ Press Trust of India, NeSL Gets Registered as Information Utility Under IBC, Business Standard (Sept. 27, 2017), https://www.business-standard.com/article/pti-stories/nesl-gets-registered-as-information-utility-under-ibc-117092701441_1.html.
- ↑ National E‑Governance Services Ltd, NeSL (last visited June 25, 2025), https://nesl.co.in/.
- ↑ NeSL Website, "About Us," [Accessed June 19, 2025].
- ↑ Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017, Regulation 21.
- ↑ Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017, Regulation 22.
- ↑ Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017, Regulation 23.
- ↑ Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017, Regulation 24.
- ↑ Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017, Regulation 25.
