Information Utilities Under the IBC
One registered IU, one document that matters: the record of default. Here's how it is made and used.
An information utility (IU) is a company registered with IBBI under section 210 to store financial information about debts and to authenticate defaults. Its output that matters most in practice is the record of default: a document the NCLT can rely on to find that a corporate debtor has defaulted, without a trial on the point.
IBBI has registered only one IU: National E-Governance Services Limited (NeSL), registration number IBBI/IU/01. An IU must be a public company whose sole object is to provide IU services, with a minimum net worth of ₹50 crore (IU Regulations, reg 3).
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What the Code Requires
- Core services (section 3(9))
- Accepting electronic submission of financial information, recording it safely and accurately, authenticating and verifying it, and giving access to specified persons.
- Obligations of an IU (section 214)
- Store information in a universally accessible format, get it authenticated by all concerned parties before storing it, meet service standards, give access as specified, and be interoperable with other IUs.
- Financial creditors (section 215(2))
- Shall submit financial information and information on assets over which security interest has been created.
- Operational creditors (section 215(3))
- At the exam cut-off: "may" submit. Since 26 May 2026: "shall, before filing an application under section 9" submit financial information to an IU.
- Debtor authentication (section 215(4), new)
- The debtor must authenticate submitted information as specified; if it does not respond within the specified manner and period, the information is deemed authenticated.
How a Default Gets Authenticated (IU Regulations, reg 21)
Since 14 June 2022, regulation 20(1A) requires a creditor to file information of default with an IU before applying under section 7 or 9.
- 1
1. Creditor files information of default
The IU assigns a unique identifier and acknowledges it.
- 2
2. IU delivers it to the debtor within seven days
By hand, post or electronic means: first to the address the debtor registered with the IU, failing which to the address on MCA21 or CERSAI, then other specified addresses.
- 3
3. Up to three reminders
If the debtor is silent, the IU reminds it at least three times, allowing seven days each time.
- 4
4. Status recorded and communicated
The IU records the status (see the table) and sends it to the debtor's creditors and to parties and sureties to the debt.
The Status Table: Exam Version and Current Version
The colour codes were removed from 2 June 2026. The exam tests the law as on 4 February 2025, so learn the colour version for the paper.
Confirms the default
At the cut-off (4 February 2025)
Authenticated (green)
From 2 June 2026
Authenticated: record of default
No response after three reminders
At the cut-off (4 February 2025)
Deemed to be authenticated (yellow); for scheduled banks, authenticated (green)
From 2 June 2026
Authenticated: record of default
Disputes the default
At the cut-off (4 February 2025)
Disputed (red)
From 2 June 2026
Disputed: information of dispute
Disputes only part of the amount
At the cut-off (4 February 2025)
Scheduled banks: authenticated for the undisputed amount
From 2 June 2026
Financial institutions (section 3(14)): authenticated for the undisputed amount
| Debtor's response | At the cut-off (4 February 2025) | From 2 June 2026 |
|---|---|---|
| Confirms the default | Authenticated (green) | Authenticated: record of default |
| No response after three reminders | Deemed to be authenticated (yellow); for scheduled banks, authenticated (green) | Authenticated: record of default |
| Disputes the default | Disputed (red) | Disputed: information of dispute |
| Disputes only part of the amount | Scheduled banks: authenticated for the undisputed amount | Financial institutions (section 3(14)): authenticated for the undisputed amount |
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Where the Record of Default Is Used
Section 7(3)(a) asks a financial creditor to file the record of default recorded with an IU "or such other record or evidence of default as may be specified". An IU record is one form of proof, not the only one. Section 7(4) directs the NCLT to ascertain default from IU records or other evidence.
Since 26 May 2026, Explanation II to section 7(5) adds that a record of default for a financial debt owed to a financial institution, filed by that institution, is sufficient for the NCLT to ascertain default. Elsewhere, CIRP Regulation 8(2)(a) lets a financial creditor prove its claim from IU records, and section 52(3) lets a liquidator verify a secured creditor's security interest from IU records.
How the Limited Insolvency Examination Tests This
A typical fact pattern: a bank files under section 7 for a ₹1.2 crore default, the IU sent the information to the debtor, and the debtor never replied. The question asks what the record shows and whether the NCLT can act on it. Under the cut-off law, a scheduled bank's unanswered default is authenticated (green), while for other creditors it is deemed authenticated (yellow).
The trap is treating an IU record as mandatory for admission. The Code accepts other evidence of default. A second trap is assuming operational creditors had to use an IU at the cut-off; under section 215(3) as it then stood, they only "may".
FAQs
What is an information utility under IBC?expand_more
A company registered with IBBI under section 210 that accepts, stores, authenticates and gives access to financial information about debts. NeSL is the only one registered.
Is a record of default from NeSL mandatory for a section 7 application?expand_more
No. Section 7(3)(a) allows a record of default from an IU or other specified record or evidence of default. Regulation 20(1A) of the IU Regulations does require the creditor to file information of default with an IU before applying.
What happens if the debtor does not respond to the IU?expand_more
After three reminders the default is recorded as authenticated. At the exam cut-off this was "deemed to be authenticated" (yellow) for most creditors and "authenticated" (green) for scheduled banks.
What do the green, yellow and red colours mean in NeSL records?expand_more
Green: authenticated. Yellow: deemed authenticated after no response. Red: disputed. IBBI removed the colour codes from 2 June 2026, but they are the law at the exam cut-off.
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