The Board for Industrial and Financial Reconstruction (BIFR) was set up in:

The Board for Industrial and Financial Reconstruction (BIFR) was set up in January 1987 and became fully functional in May 1987.

About the BIFR:

• It was set up under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA).
• It was a quasi-judicial body under the Department of Financial Services, Ministry of Finance.
• Its purpose was to identify "sick" industrial companies (companies whose losses had wiped out their net worth) and to decide whether they could be revived or should be closed down (wound up).
• It could approve rehabilitation schemes, such as financial restructuring, mergers, changes in management, or sale of assets.
• Appeals against BIFR decisions were heard by the "Appellate Authority for Industrial and Financial Reconstruction" (AAIFR).

Problems with the BIFR:

• Cases often took many years, and companies sometimes used the BIFR to delay repaying their creditors, because once a company was referred to the BIFR, legal action against it was suspended.
• Very few sick companies were successfully revived.

Abolition:

• The SICA was repealed in 2016, and the BIFR and AAIFR were abolished on 1 December 2016.
• Their functions were taken over by the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT).
• Cases of financially stressed companies are now dealt with under the Insolvency and Bankruptcy Code (IBC), 2016, which sets time limits for the resolution process (usually 180 days, extendable to 330 days).
• The Insolvency and Bankruptcy Board of India (IBBI) was set up on 1 October 2016 as the regulator under the IBC.

Other related bodies and laws:

• Debt Recovery Tribunals (DRTs): set up under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
• SARFAESI Act, 2002: allows banks to recover bad loans by taking possession of the security (property) without the intervention of courts.
• Asset Reconstruction Companies (ARCs): buy bad loans from banks.
• National Asset Reconstruction Company Limited (NARCL): the "bad bank", set up in 2021.

Why not the other options?

• ✗1964 is the year the Industrial Development Bank of India (IDBI) was set up.
• ✗1991 is the year of India's economic reforms.
• ✗2016 is the year the BIFR was abolished and the IBC was enacted.