Banking Awareness Set 87 (Insolvency and Bankruptcy Code)

Insolvency and Bankruptcy Code Questions for upcoming banks and insurance exams – SBI PO, IBPS PO/Clerk, RRB PO/Clerk, RBI, IPPB, LIC, NICL, UIIC.

1. When was the Insolvency and Bankruptcy Board of India set up?
   A) April 1, 2016
   B) July 1, 2016
   C) October 1, 2016
   D) June 1, 2016
   
   View Answer

   Option C
   Some Extra:
   The Insolvency and Bankruptcy Board of India was established on October 1, 2016 in accordance with the provisions of The Insolvency and Bankruptcy Code, 2016.
2. When was the Insolvency and Bankruptcy Code (IBC) passed by the Lok Sabha?
   A) 2016
   B) 2015
   C) 2014
   D) 2013
   
   View Answer

   Option A
   Some Extra:
   The Insolvency and Bankruptcy Code, 2015 was introduced in Lok Sabha in December 2015. It was passed by Lok Sabha on 5 May 2016.
3. What does NCLT stand for in the context of the insolvency code?
   A) National Company Liquidation Tribunal
   B) National Corporate Liquidation Tribunal
   C) National Company Law Tribunal
   D) None of these
   
   View Answer

   Option C
   Some Extra:
   The Central Government has constituted National Company Law Tribunal (NCLT) under section 408 of the Companies Act, 2013 (18 of 2013) w.e.f. 01st June 2016.
4. What is the aim of the Insolvency and Bankruptcy Code?
   A) It aims to clean up the balance sheets of public sector banks
   B) It aims to overhaul the existing framework for dealing with insolvency of corporations, individuals, partnerships and other entities.
   C) It aims to liquidate all outstanding debts and clean up bank balance sheets
   D) All of the above
   
   View Answer

   Option B
   
5. What is the minimum default required to initiate insolvency procedure for corporate debtors under the Insolvency and Bankruptcy Code?
   A) Rs 2,00,000
   B) Rs 5,00,000
   C) Rs 3,00,000
   D) Rs 1,00,000
   
   View Answer

   Option D
    
6. In case of individual defaulters and unlimited partnerships, the minimum amount required for attracting the insolvency code is
   A) Rs 1,000
   B) Rs 2,000
   C) Rs 5,000
   D) Rs 10,000
   
   View Answer

   Option A
7. The Insolvency and Bankruptcy Code was drafted by whom?
   A) Securities and Exchange Board of India
   B) Reserve Bank of India
   C) Bankruptcy Law Reforms Committee 
   D) Indian Banks’ Association
   
   View Answer

   Option C
   Some Extra:
   Former Union law secretary T K Viswanathan was the key architect of the Insolvency and Bankruptcy Code, as chairman of the Bankruptcy Law Reforms Committee which produced the report in this regard.
8. For corporate debtors, the Insolvency and Bankruptcy Code proposes a two stage process. Which one of the following is not one of them?
   A) Debt restructuring 
   B) Liquidation, if not found viable
   C) Insolvency Resolution Process during which the viability of continuing the business is assessed
   D) None of these
   
   View Answer

   Option A
    
9. Under the Insolvency and Bankruptcy Code (IBC), distribution of the liquidation proceeds priority has been set as:
   1. Insolvency resolution cost
   2. Secured debt and Workmen’s dues for the past
   3. Employees dues
   4. Unsecured debt
   5. Government dues
   A) 3, 1, 4, 5, 2
   B) 1, 2, 3, 4, 5
   C) 2, 4, 1, 3, 5
   D) 4, 3, 1, 2, 5
   
   View Answer

   Option B
   
10. Which of the following steps is not a part of Insolvency Resolution Process under the Insolvency and Bankruptcy Code (IBC)?
    A) Appointment of a creditors’ committee and formulation of a revival plan
    B) Appointments of a resolution professional 
    C) Moratorium on the sale of assets
    D) Liquidation of assets
    
    View Answer

    Option D
     

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