Insolvency and Bankruptcy Code, 2016 | Miscellaneous provisions

Section 244 of IBC, 2016: Transitional Provisions, Central Government Powers and Interim Regulations

Section 244 of the Insolvency and Bankruptcy Code, 2016 provides an interim legal mechanism for exercising regulatory powers before the Insolvency and Bankruptcy Board of India (IBBI) is constituted or a financial sector regulator is designated under Section 195. It also identifies subjects on which transitional regulations may be made.

Section 244 - Complete statutory text

244. Transitional provisions.

(1) Until the Board is constituted or a financial sector regulator is designated under section 195, as the case may be, the powers and functions of the Board or such designated financial sector regulator, including its power to make regulations, shall be exercised by the Central Government.

(2) Without prejudice to the generality of the power under sub-section (1), the Central Government may by regulations provide for the following matters:-

(a) recognition of persons, categories of professionals and persons having such qualifications and experience in the field of finance, law, management or insolvency as it deems necessary, as insolvency professionals and insolvency professional agencies under this Code;

(b) recognition of persons with technological, statistical, and data protection capability as it deems necessary, as information utilities under this Code; and

(c) conduct of the corporate insolvency resolution process, insolvency resolution process, liquidation process, fresh start process and bankruptcy process under this Code.

The above text reproduces the provision contained in the supplied webpage. For the authoritative consolidated text and subsequent legislative changes, consult India Code and the IBBI legal framework.

Meaning and purpose of Section 244

Transitional provisions are temporary legal arrangements intended to bridge the period between enactment of a statute and the establishment or designation of the institutions required to implement it. Section 244 prevents a regulatory vacuum while the insolvency regulatory architecture is being set up.

For this section, the Board means the Insolvency and Bankruptcy Board of India established under Section 188. A financial sector regulator refers to a regulator relevant to the financial sector as contemplated by the Code; Section 195 is expressly referenced in the transitional provision.

Section 244(1): Interim exercise of regulatory powers

Sub-section (1) provides that, until the relevant Board is constituted or a financial sector regulator is designated, the Central Government exercises the corresponding powers and functions, including the power to make regulations. The words "as the case may be" make the arrangement dependent on which institution or designation is pending.

This is a conditional, transitional allocation of statutory authority. It should not be interpreted as an unlimited, continuing transfer of every IBBI function to the Central Government after the statutory regulator has been constituted.

Section 244(2): Matters covered by transitional regulations

Clause (a): Insolvency professionals and professional agencies

The Central Government could provide for the recognition of suitable persons and categories of professionals as insolvency professionals and insolvency professional agencies, having regard to qualifications and experience in finance, law, management or insolvency. An insolvency professional performs functions assigned under the Code, subject to applicable registration and regulatory requirements. An insolvency professional agency is a body regulated under the Code for professional membership and oversight.

Clause (b): Information utilities

Transitional regulations could recognize entities with the necessary technology, statistical and data-protection capabilities as information utilities. Information utilities are regulated entities that receive, authenticate, maintain and provide access to specified financial information under the IBC framework.

Clause (c): Insolvency and bankruptcy procedures

The provision also covers interim regulation of the corporate insolvency resolution process (CIRP), insolvency resolution, liquidation, fresh start and bankruptcy processes. These are distinct statutory processes with separate eligibility requirements and procedural rules. The scope of their present operation must be checked against commencement notifications and the currently applicable regulations.

Present-day relevance of this transitional provision

The IBBI was established in 2016 and now administers significant parts of the insolvency regulatory framework. Accordingly, Section 244 is principally relevant to the initial implementation and transitional history of the Code, rather than as a general substitute for the Board's ordinary powers today. Existing rules, regulations, amendments and commencement notifications must be consulted to determine the operative requirements for a particular proceeding.

Section 244 does not by itself exempt an insolvency professional, information utility or insolvency professional agency from the registration and compliance requirements applicable under the current IBBI framework.

Section 188: establishment and incorporation of the Insolvency and Bankruptcy Board of India.
Section 195: the provision specifically cross-referenced in Section 244(1) concerning the designated financial sector regulator.
Section 196: powers and functions of the Board.
Section 207: registration of insolvency professionals.
Sections 209 and 210: registration and regulation of information utilities.
Section 240: the Board's power to make regulations, subject to the statutory framework.
Section 239: the Central Government's power to make rules.

Frequently asked questions

What is Section 244 of the IBC?

It is a transitional provision enabling the Central Government to exercise specified regulatory functions while the Board has not yet been constituted or a relevant financial sector regulator has not been designated.

Can the Central Government make regulations under Section 244?

Yes, within the transitional circumstances stated in sub-section (1), including on the matters identified in sub-section (2).

Does Section 244 permanently replace the IBBI?

No. Its opening condition makes the provision transitional. The IBBI is the established insolvency regulator, and its current statutory powers must be read with the Code and applicable regulations.

What entities are mentioned in Section 244(2)?

Insolvency professionals, insolvency professional agencies and information utilities are expressly covered, together with regulation of specified insolvency and bankruptcy processes.

Are all insolvency processes mentioned in Section 244 currently operational?

Not necessarily. The provision lists possible subjects for transitional regulation; the commencement and application of individual processes depend on separate statutory and notification requirements.

Official legal sources

Updated October 23, 2026. General legal information only. Verify current notifications, amendments and judicial interpretations before relying on this article for a specific matter.