This blog examines the role of Information Utilities (IUs) in India’s Insolvency and Bankruptcy Code and argues that their current design and functioning exhibit instances of epistemic fragmentation. Although the BLRC imagined IUs as neutral, technologically sophisticated, market-driven institutions that would eliminate information asymmetry and accelerate time-bound resolution, real-world adoption has been slow, uneven, and marked by trust deficits. Only NeSL operates as a de facto monopoly, and while the statutory architecture promotes standardisation, the limited uptake, absence of penalties for non-submission, and exclusion of informal creditors create persistent data blind spots. These gaps undermine the IBC’s aim of building a coherent, shared informational base for creditor decision-making.
The piece reframes these operational problems as issues of epistemic coherence. It identifies mismatches between what the IU framework is designed to achieve (symmetry, neutrality, and formalised facts) and how creditors, debtors, and tribunals actually interact with it. This includes tensions between the IU’s rigid data formalism and India’s diverse credit ecosystem, the creditor-centric governance design that fuels debtor mistrust, and a contestability mechanism that flags disputes but cannot resolve them. The resulting fractures weaken the information layer that the IBC depends on, often pushing tribunals back into paper-based verification despite the Code’s digital aspirations.
The blog concludes by suggesting that strengthening IUs is not merely a technical matter but an institutional one. Improving epistemic coherence requires clearer statutory mandates on data submission, building trust through governance reform, addressing digital capacity gaps for smaller creditors, and ensuring coordination with parallel systems like the Public Credit Registry. It argues that unless the IU architecture aligns with the lived realities of insolvency practice, India risks sustaining an information regime that is digitally elegant in design but fragmented in operation, weakening the larger philosophy of time-bound, creditor-driven insolvency resolution.