ROLE OF BIFR IN SICK

INDUSTRIES

Ritika Sharma.
537.

Nagindas Khandwala College.

DEFINITION
Industrial

sickness- an industrial unit tends

to show signs of financial distress like short term

liquidity problems, revenue losses, operating
losses and moving in the direction of over use of
external credit.

INTRODUCTION
Board

For Industrial And Financial

Reconstruction (BIFR) was set up in
January,1987.

AAIRFR

was constituted in April 1987.

 Based

on the recommendations of the

committee of experts, the government
enacted a special legislation namely, the
Sick Industrial Companies Act, 1985.
(SICA)

BOD

of the sick industries must make a

reference to BIFR within 60 days after
finalization of accounts.

OBJECTIVES OF SICA
Timely

detection of sick and potentially

sick companies.

Speedy

determination by experts.

Expeditions
To

enforcement of the measures.

provide reconstruction of the company.

 Proper

management of the company by

change or takeover.

Amalgamation

company.

Sale

of the sick industrial

or lease of a part.

ROLE OF BIFR
Reporting

by auditor as per CARO.

Procedure

for making reference.

Inquiry

by bench of board.

Operating

agency.

 Reporting
Enquiry
Revival
Order

to the BIFR.

by the BIFR.

package.

by BIFR.

MEASURES TAKEN BY BIFR

Restructuring

company.

the capital base of the

Inducting

more capital to improve its

resources position.

Merger

and amalgamation.

Providing

soft loans to the company.

 Technological

changes.

Change

in the management.

Writing

off the interest burden.

Rescheduling
Providing

its loans.

fiscal concessions.

REASONS FOR LOW SUCCESS

RATE WITH BIFR
Late

reporting of sickness to the BIFR.

Delay

in sanctioning and implementing

rehabilitation scheme.

Improper

implementation of the
rehabilitation scheme.

 Inherent

schemes.

weakness of the rehabilitation

Lack

of commitment on the part of

management.

Incompetence
Policy

of operating agencies.

of the BIFR.