View source for Board for Industrial and Financial Reconstruction

The Board of Industrial and Financial Reconstruction (BIFR) was established in 1987 under the Ministry of Finance to address sick industrial companies, aiming to either revive them or close them if deemed non-viable. It dissolved in 2016, with its functions transferred to the National Company Law Tribunal (NCLT) and National Company Law Appellate Division (NCDAD) under the Insolvency and Bankruptcy Code.

BIFR's origins lie in the Sick Industrial Companies Act of 1985 (SICA), becoming operational in 1987. A 1991 industrial policy expanded its scope to include public sector enterprises, while the SARFAESI Act of 2002 removed corporate debt from its purview, empowering banks with better recovery mechanisms. The Companies Amendment Bill in 2001 aimed to address BIFR's inefficiencies, and the SICA Repeal Act of 2003 sought its dissolution but faced legal challenges.

BIFR's structure included a chairman and up to fourteen members with relevant expertise, focusing on large or medium-sized companies. It could recommend revival plans, management changes, amalgamation, sale, or closure within six months.

Activity-wise, by March 1991, BIFR handled 1020 cases, leading to 182 revival plans and 120 closures. By end of 2007, it processed 5,471 references. While some companies like Bharat Heavy Electricals Limited and Arvind Mills achieved recoveries, many failed due to resource constraints, delays, and political hesitancy.

BIFR's legacy is mixed; while successes occurred when promoters were proactive (e.g., MS Shoes), it was often criticized for prolonging unviable companies. Nirmala Ganapathy described BIFR as a graveyard where few recovered without promoter initiative.