Overview One of the main aims of the Insolvency and Bankruptcy Code, 2016 was resolution in a timely manner. It has now become a reality by forming a tool which endeavours to provide undisputed information. Such a tool is called as an information utility. Along with the provisions of National e-governance Services Limited, the single station enumerating all the financial transactions of lenders gave approval by the Insolvency and Bankruptcy Board of India, helping it to be the first Information Utility under the Insolvency and Bankruptcy Code, 2016. There was a need for such an instrument for bridging the gap that was found in the resolution process. There were apprehensions regarding the information to establish a fact. Information utility will offer information for the resolution, and the courts shall also dispose of the cases swiftly. The biggest obstacle in the path of resolution of a process has been identified as lack of information. Among all the important steps, the essential one would be to establish the facts correctly regarding what all assets are available, who the claimants are and what contracts are in force. Here the role of Information Utility (IU) shall come to the fore. IU shall store the information of the users, thereby allowing the lenders to take the informed decision about credit transaction and the information that it provides can be used as shreds of evidence in bankruptcy cases. About NeSL National e-governance Services Limited is owned by the leading public financial institutions, and it was incorporated as a union Government company. It deals with critical financial information that has the objective of serving the financial sector and its stakeholders. It’s owned by the State Bank of India and Life Insurance Corporation among others. The National e-governance Services Limited (NeSL) was instituted to expand the Information Infrastructure of India with its focus mainly on the delivering services for government and public financial institutions. The IBBI (Insolvency and Bankruptcy Board of India) has registered the National e-governance Services Limited as the first IU in accordance with the IBBI Regulations (IU), 2017. What is meant by Information Utility? An information utility is an information network that provides information regarding financial aspects like borrowings, defaults, security interests, among others. This utility shall provide financial information to businesses, adjudicating authorities, financial institutions, resolution professionals, stakeholders etc. The information utility not only provides but also collects, collate, and authenticate the financial information. The object of such collection, collation, authentication, and dissemination of financial information of debtors is to facilitate quick decision making in the resolution proceedings. Information utility is registered under Section 210 of the Insolvency and Bankruptcy Code (IBC), 2016. It is governed and regulated by the Insolvency and Bankruptcy Board of India. What is IBC? IBC stands for Insolvency and Bankruptcy Code. IBC is a law that looks to consolidate the existing framework by making a uniform code for insolvency and Bankruptcy. Insolvency and Bankruptcy Code was implemented through an act of parliament. The law was initiated due to a large number of non-performing loans of banks and sluggishness in debt resolution. The code received the assent of the President on May 28th 2016. The object of the IBC is to ensure smooth and economically viable resolution for resolving insolvencies. It aims to protect the interests of small investors. IBC helps in improving the ease of doing business. Types of information under Information Utilities The various kinds of information stored under information utilities are listed below: Information regarding records of liabilities of solvent entity that are reliable.Information regarding assets that are pledged as collateral against secured credit contracts.Reliable evidence regarding defaults.Records containing reliable information of cash flow statements and balance sheet of the entity. Who is eligible to submit the information? According to section 215(2) of the IBC 2016, the financial information and other information related to the assets shall be submitted by the financial creditor. A financial creditor is someone to whom a financial debt is owed. It is the duty of the financial creditor to submit such information. The operational creditor can also submit financial information to the IU according to section 215(3) of the IBC. An operational creditor is someone who is the supplier of goods and services to a firm or a company. Insolvency professional, regarding any insolvency, resolution, liquidation or bankruptcy proceedings, may also submit information to the Information utility under regulation 38(1). What are the responsibilities of a registered Information Utility? There are a number of responsibilities that an information utility (IU) must perform to ensure the authenticity of the information. These are enumerated below: The IU must create and store information in a universally acceptable form.The IU shall accept electronic records of financial information from those people who are under obligation to submit financial information in the form and manner as specified by the regulations.The IU must accept electronic submission of financial information in specified form from those people who intend to submit such information’s.It is the duty of the IU, prior to storing information, to get the information authenticated by various parties concerned. The IU is obliged to provide the financial information stored by it to anyone who intends to access such information in accordance with the regulations.The IU must publish statistical information’s as and when required by the regulations.The IU shall work in compliance with other IU’s. Also, Read: NBFC’s To Submit Financial Information with NeSL – RBI’s First IU under IBC. What is the procedure for submitting the information to the Information Utility (IU)? A set of steps must be followed in order to submit the information to the IU. The procedure followed to submit information to the IU is as follows: Step-1 The information to be submitted must be submitted in Form C under regulation 20 of IBBI regulations, 2017. Step-2 The information that is received is forwarded for authentication. Step-3 The National e-governance Services Limited (NeSL), after the receipt of the information, will assign a unique identifier to the information and shall notify the user about the unique identifier, the terms and conditions of authentication and verification of the information. It shall also notify about the consent framework for allowing the third parties to have access to the information. Step-4 Then the user may authenticate or can disagree with all or part of the information within the prescribed time period. The time period shall be prescribed by the NeSL. Step-5 The status of the authentication shall be sent to the one who submitted the information. Step-6 Thereafter, the person who authorises the information must affix his digital signature or the Aadhar based e-sign whenever the information is put up on the platform. Step-7 Eventually, the NeSL will verify the identity of the authenticator and the NeSL shall have no further responsibility in case the information of the submitter is either not authenticated or disputed. Things to be kept in mind In order to ensure a greater degree of credibility of IU, the following points must be kept in mind: A registered user is provided with an annual statement of all information relating to the user.The information can be modified, updated, or even an error can be corrected once it is submitted. However, it is critical to note that proper reason must be provided for making any changes in the information. The authentication of the information is carried out item wise for the data.The information shall be kept until eight years from the date of closure of the debt or since the date of the last update in a debt account.In case someone is not content with the services offered by the National e-governance Services Limited, he/she can lodge their grievance in the web-based Grievance Redressal Mechanism enabled in its website. The said grievances shall be resolved within seven working days, and the one who has lodged the grievance shall be updated via mail. Challenges and Concerns As this tool provides financial information’s and various other providences, it also faces certain challenges and concerns. Among all the challenges, the real challenge is receiving authentication from the other party. Authentication is an essential ingredient for its success. Information will be like evidence only when the authentication of the information is achieved due to the sensitivity of the information or resistance in sharing information. The other party in this context includes the financial creditors, operational creditors and corporate debtors. Getting information from these could pose a challenge considering there might be resistance in sharing the information. The issue of privacy of data is another debatable concern hounding this service. Although there is a risk management framework approved by the board of National e-governance Services Limited that deals with the security and the integrity of the system and information at the same time. It will take care of the procedure to recover the information in case there is any unforeseen disaster, whether man-made or natural. However, the data stored in the digital database is still not immune to data theft and piracy. A more effective and well-equipped security system would be appreciated by the masses. It would deter unwanted and unauthorised access to vital information. The data that the IU contains is highly sensitive; therefore, a foolproof security system must be used to thwart the advances of the violators. Conclusion The origin of the Information Utility is without any doubt a great initiative in these times. Access to the information makes it even more productive. It definitely provides the stakeholders with a platform to make a little more conscious decisions. It provides lenders and creditors with all the necessary information about the insolvency resolution procedure. Lack of information has been the greatest hindrance to an effective resolution. The creation of this tool would help in avoiding this hindrance, thereby leading to effective resolution. It would make the process much better and NeSL being the only Information Utility in the country would hopefully fulfil the need for account aggregation by ensuring a reliable storage and information source. One of the important aspects is that the wealth of information will be stored in a central server located in India, which will be regulated and governed by the Indian rules and regulations. Read, More: Submission of Financial Information to Information Utility.