All financial service providers including NBFC have also been finally brought under the ambit of IBC. Banks are still excluded.
Mandatory Permission of Regulator
The regulator can only initiate proceedings under IBC against a financial service provider.
There will be a suo motu interim moratorium as soon as an application is filed till it is accepted or rejected.
It is to be ensured that during IBC process, the financial services provider will be a going concern and business will not be suspended.
Appointment of Administrator
An administrator will be appointed as soon as CIRP is initiated.He will have role similar to an insolvency professional. The regulator can also constitute an advisory committee to advise the administrator.
The resolution plan by the Committee of creditor needs to be approved by the regulator.
If no resolution plan comes or accepted then, the financial provider will be liquidated. Any voluntary liquidation can be initiated only after seeking a permission from the regulator.
Third Party Assets
Any assets of third parties, under the custody of the financial service provider, facing IBC, will not be impacted. Rather, it will be under the trust so formulated.