Corporate Affairs Ministry Notifies Insolvency Law for Financial Services Companies

The Government notified rules under the insolvency law to deal with resolution of systemically important financial service providers, excluding banks.

The corporate affairs ministry has notified the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 (Rules).

It will provide a generic framework for insolvency and liquidation proceedings of systemically important Financial Service Providers (FSPs) other than banks, an official statement said. Section 227 of the Code enables the central government to notify, in consultation with the financial sector regulators, FSPs or categories of FSPs for the purpose of insolvency and liquidation proceedings.