On November 18, 2019, In exercise of the powers conferred by section 227 of the Insolvency and Bankruptcy Code (IBC), 2016 (31 of 2016), the Ministry of corporate affairs, Government of India (GoI) in consultation with the Reserve Bank of India (RBI) issued a notification that enumerates the category of financial services providers (FSP) who can go for “generic framework” under IBC.Key Points:
i.Now the Non-Banking Financial Companies -NBFCs (which include housing finance companies-HFCs) with assets worth at least Rs 500 crore can be taken for debt resolution & liquidation proceedings under the provisions of the IBC, 2016 read with the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019.
ii.This move will help to overcome the problems in the NBFC sector which are currently facing liquidity crisis.
About Ministry of corporate affairs:
Headquarters– New Delhi
Union Minister -Nirmala Sitharaman
Minister of State for Corporate Affairs– Anurag Thakur
Founded-April 1, 1935
Headquarters: Mumbai, Maharashtra
Governor– Shaktikanta Das