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Information Utilities under the IBC: Their Legal Role in Proving Debt and Default after the 2026 Amendments
Most disputes at the threshold of an insolvency case turn on two facts: whether a debt exists and whether it is in default. The Insolvency and Bankruptcy Code, 2016 (“IBC”) created a specialised institution, the information utility, to hold authenticated records of exactly those facts. For several years, information utilities remained a secondary source of evidence. Amendments that took effect in 2026, to both the IBC and the regulations governing information utilities, have given their records considerably more weight, and for operational creditors they have made filing a precondition to insolvency applications.
What is Information Utility under the IBC?
Section 3(21) of the IBC defines an “information utility” as a person registered with the Insolvency and Bankruptcy Board of India (“IBBI”) under Section 210. Part IV, Chapter V of the IBC (Sections 209 to 216) governs registration, core services and the submission of information. The detailed framework is in the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017 (“IU Regulations”).
Section 213 requires an information utility to provide core services, which Section 3(9) defines to include accepting electronic submission of financial information, safekeeping it, authenticating and verifying information submitted, and providing access to it. National E-Governance Services Ltd. (“NeSL”) was registered with the IBBI as an information utility in 2017.
How a Record of Default is Created?
When a creditor submits information of default, the IU Regulations require the utility to seek authentication from the debtor. Regulations 20 and 21 set out that process: the debtor is informed and given an opportunity to confirm or dispute the default.
The IBBI (Information Utilities) (Amendment) Regulations, 2026, notified on 1 June 2026, refined the outcomes, as reported in regulatory digests:
- where the debtor confirms the default, or does not respond after the prescribed reminders, the status is recorded as authenticated and a record of default is issued;
- where the debtor disputes the default, the status is recorded as disputed and an “information of dispute” is issued instead;
- for financial institutions, where only part of the default or specific non-financial details are disputed, the undisputed portion may be recorded as authenticated; and
- the earlier prescribed forms have been replaced by formats issued through IBBI circulars.
Readers should consult the regulations as published in the Gazette, and the IBBI circulars prescribing the current formats, for the exact time periods and procedure.
Evidentiary Value Before 2026
Section 7(3)(a) has long permitted a financial creditor to support a Section 7 application with a record of default recorded with an information utility, or other specified records or evidence of default. In Swiss Ribbons Pvt. Ltd. v. Union of India, (2019) 4 SCC 17, the Supreme Court rejected a challenge based on the fact that information utilities may be private entities. Relying on the safeguards under Regulations 20 and 21, including notice to the debtor and authentication, the Court treated information utility records as prima facie evidence of default, subject to rebuttal by the debtor.
What Changed for Information Utilities From 26 May 2026?
The Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026), effective from 26 May 2026, introduced three significant changes to information utilities, default records and insolvency applications under the IBC.
1. Sufficiency of IU records for financial institutions. Explanation II to the substituted Section 7(5) provides that where a record of default in respect of a financial debt owed to a financial institution, recorded with an information utility, is furnished with that institution’s Section 7 application, the record “shall be considered sufficient” for the Adjudicating Authority to ascertain the existence of default. Read with Explanation I, which excludes grounds for rejection other than those in Section 7(5)(a), this materially strengthens the position of institutional lenders relying on authenticated records.
How this interacts with the Supreme Court’s description of such records as rebuttable prima facie evidence in Swiss Ribbons is yet to be examined in reported appellate decisions. The Explanation applies only to financial institutions and only to records of default; it does not by its terms apply to a record that is marked disputed.
2. Mandatory filing by operational creditors. Section 215(3) previously stated that an operational creditor “may” submit financial information to an information utility. It now provides that an operational creditor “shall”, before filing an application under Section 9, submit such information in the manner specified.
3. Deemed authentication. New Section 215(4) requires the corporate debtor or debtor to authenticate submitted information in the specified manner and period, and provides that if the debtor does not respond within that period, the information shall be deemed authenticated. The practical effect is that a debtor that ignores authentication requests may find the creditor’s information treated as authenticated.
The Amendment Act also brings information utilities within the new category of “service providers” under Section 3(31A), subject to the IBBI’s expanded inspection, investigation and disciplinary framework under Sections 217 to 220.
Implications for Different Participants
The 2026 IBC amendments change how information utility records affect financial creditors, operational creditors and corporate debtors. The practical impact differs depending on the party involved, particularly in relation to proof of default, mandatory filing and authentication.
Financial institutions. An authenticated record of default is now, by statute, sufficient to establish default for the purposes of admission. Ensuring timely and accurate submission of default information becomes correspondingly important.
Other financial creditors. Explanation II refers specifically to financial institutions. Other financial creditors may still rely on IU records under Section 7(3)(a), but the statutory sufficiency rule is not expressed to extend to them.
Operational creditors. Submission of financial information to an information utility is now a step that the statute requires before a Section 9 application. Applications should be prepared with this in mind, alongside the demand notice under Section 8.
Corporate debtors. Authentication requests from an information utility carry real consequences. Silence can lead to deemed authentication, while a timely dispute results in an information of dispute rather than a record of default.
Unsettled Questions
Several issues under the amended IBC and information utility framework remain to be clarified through regulations, IBBI circulars and judicial decisions:
- the precise effect of Explanation II on a debtor’s ability to contest default before the Adjudicating Authority;
- the consequences of filing a Section 9 application without prior submission of financial information to an information utility; and
- the treatment of information utility records where only part of the default is disputed.
Until appellate guidance emerges, the amended IBC provisions, the 2026 IU Regulations and relevant IBBI circulars should be the starting point for assessing these issues
FAQs
What is an information utility under the IBC?
An information utility is an IBBI-registered entity that stores, authenticates and provides access to financial information and records of default.
Is IU filing mandatory for operational creditors?
Yes. From 26 May 2026, an operational creditor must submit the required financial information to an information utility before filing a Section 9 application.
What happens if a debtor does not authenticate the information?
Under Section 215(4), failure to respond within the prescribed period can result in the information being deemed authenticated.
Is an IU record sufficient to prove default?
For a financial institution’s Section 7 application, Explanation II to Section 7(5) provides that a qualifying record of default recorded with an information utility is sufficient to ascertain the existence of default.
Legal Information Disclaimer
This article provides general information about Indian law as it stood on 16 September 2026. It is not legal advice, and reading it does not create an advocate–client relationship. Statutes, rules and judicial interpretations change, and their application depends on the facts of each matter. Readers should consult the current official text of the laws and judgments cited and should not act on this information without advice specific to their circumstances. This article is published for legal awareness and education and is not intended to advertise or solicit professional work.
Sources / Authorities
- Insolvency and Bankruptcy Code, 2016 — Sections 3(21), 3(31A), 7, 9, 209–220 (as amended) — IBBI – Legal Framework
- Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026), clauses 2, 4, 62 to 66 — Gazette text (IBBI); Notification S.O. 2625(E) dated 22 May 2026 — IBBI
- Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017 — Regulations 20 and 21 — IBBI – Regulations
- IBBI (Information Utilities) (Amendment) Regulations, 2026, No. IBBI/2026-27/GN/REG146 dated 1 June 2026 — summary, IBC Laws
- Swiss Ribbons Pvt. Ltd. v. Union of India, (2019) 4 SCC 17, Supreme Court of India, 25 January 2019 — Supreme Court Reports copy
