Insolvency and Bankruptcy Code Questions

Dear aspirants,
We are presenting you the Insolvency and Bankruptcy Code questions for RBI Grade B Finance Section of the exam. These questions will cover the topics such as Insolvency and Bankruptcy Code 2016, insolvency resolution process etc which are very important from exam point of view. Also do read the answers provided at the end of quiz.

1. Which among the following correctly explains the meaning of bankruptcy?
   1. Legal status of firm or individual who is unable to meet its debt obligations
   2. A bank not able to recover its due from borrowers
   3. An economy not able to recover from recession
   4. None of these
2. According to provisions of Insolvency and Bankruptcy Code 2016 (IBC, 2016), who can initiate insolvency resolution process (IRP)?
   a) Debtor
   b) Creditor
   c) Government
   d) Reserve Bank of India
   Select the correct answer from the options given below:
   1. Both a and b
   2. Both b and c
   3. Only a, b and c
   4. All are correct
3. Who will act as regulator under IBC, 2016?
   1. Reserve Bank of India
   2. Insolvency and Bankruptcy Board of India (IBBI)
   3. National Company Law Tribunal (NCLT)
   4. All of these
4. During insolvency resolution process, within how many days creditor has to proceed with a revival plan failing with company force to go for liquidation?
   1. 45 days
   2. 90 days
   3. 180 days
   4. 270 days
5. During insolvency resolution process, how much percentage of creditors must agree for revival plan to make revival options applicable?
   1. 25%
   2. 50%
   3. 60%
   4. 75%
6. In case there is complexity in deciding the revival plan, how many days of one time extension can be provided to creditors to decide on the revival plan?
   1. 30 days
   2. 45 days
   3. 90 days
   4. 100 days
7. Who will acts as adjudicating authority in case of insolvency resolution for companies?
   1. National Company Law Tribunal (NCLT)
   2. Debt Recovery Tribunal (DRT)
   3. Insolvency and Bankruptcy Board of India (IBBI)
   4. Supreme Court
8. Who will acts as adjudicating authority in case of insolvency resolution for individual or proprietor firms?
   1. National Company Law Tribunal (NCLT)
   2. Debt Recovery Tribunal (DRT)
   3. Insolvency and Bankruptcy Board of India (IBBI)
   4. Supreme Court
9. In case a company goes for liquidation, which among the following have the first claim to clear the debts?
   1. Secured creditor
   2. Workmen dues for 24 months
   3. Unsecured creditors
   4. Government dues
10. Which has become the first bankruptcy case in the country resolved under Insolvency and Bankruptcy Code 2016?
    1. Essar Steel Ltd
    2. Monnet Ispat and Energy Ltd
    3. Jaypee Infratech Ltd
    4. Bhushan Steel Ltd
11. What is the minimum amount of default in case of companies to initiate insolvency process?
    1. Rs 1000
    2. Rs 10000
    3. Rs 100000
    4. Rs 1000000
12. How many stages are there in process of insolvency?
    1. 4
    2. 3
    3. 2
    4. 1
13. What is the minimum amount of default in case of individual to initiate insolvency process?
    1. Rs 1000
    2. Rs 10000
    3. Rs 100000
    4. Rs 1000000
14. What is India’s ranking in World Bank’s index on the case of resolving insolvencies?
    1. 100^th
    2. 125^th
    3. 131^st
    4. 136^th
15. As on date how many companies has been referred to NCLT by Reserve Bank of India?
    1. 6
    2. 12
    3. 18
    4. 24

Answers

1. 1
2. 1
   Business or debtor who has defaulted and creditors can inititate insolvency resolution process (IRP).
3. 2
   Insolvency and Bankruptcy Board of India, an apex body for promoting transparency & governance in the administration of the Code; will be involved in setting up the infrastructure and accrediting IPs and IUs
4. 3
   The resolution professional after evaluating all claims constitutes a creditors committee. The committee consists of financial creditors of the corporate debtor excluding party creditors. The committee considers a proposal and decide whether to proceed with a revival plan or liquidation within a period of 180 days
5. 4
   At least 75% of creditors must agree for a revival plan.
6. 3
   One-time extension by 90 days can be provided if 75% of creditors feels that process is complex to undertake.
7. 1
   NCLT acts as adjudicating authority for corporate insolvency cases
8. 2
   DRT acts as adjudicating authority for individual cases
9. 2
   In case company goes for liquidation, the following is the order of priority for settlement of claims: insolvency resolution process costs and the liquidation cost, workmen’s dues for the period of twenty-four months, debts owed to a secured creditor, wages and any unpaid dues owed to employees other than workmen, debts owed to unsecured creditors, government dues, any remaining debts and dues, preference shareholders, equity shareholders or partners.
10. 4
11. 3
    To begin the process of insolvency against the corporates, default should be minimum of Rs One Lakh rupees
12. 3
    The Bankruptcy code proposes two independent stages: Insolvency Resolution Process and Liquidation
13. 1
    To begin the process of insolvency against the individuals, default should be minimum of Rs One Thousand rupees
14. 4
15. 2

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