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RBI has issued a circular dated 19th December 2017, directing NBFC’s to furnish its financial and assets related information to the Information Utility.IUC19122017063A65D368CD4F6DAEC111841091C932
The circular mentioned above regulated by RBI has asked banks and other financial institutes like NBFC’s to share information about their assets of creditors with Information utilities registered under IBC, 2016. Such directives of the Reserve Bank of India will help Information utilities to store financial information.
Further, this stored information can be used to establish defaults and verify the claims expeditiously to complete transactions under the IBC in a time-bound manner. Currently National E-Governance Service Limited (NeSL) is the only Information utility registered in India. The Main role of NeSL is to holding the information regarding any debt/ claim, as submitted by the financial or operational creditor and verified and authenticated by the parties to the debt.
An information utility is a professional organization, registered under section 210 of IBC, 2016. The role of this organization is to collect financial information and get the authenticity of the said information by other parties connected to the debt and store the same. Further, to provide the collected information to the resolution professional, creditors, and stakeholders during the process of insolvency. Subsequently, the stakeholder can avail of this information at the time of insolvency and can make their decision accordingly. The main significance of Information Utility expected that with its process the information gathered would reduce the amount of NPA’s in the banking sector.
Section 3(9) of IBC, 2016 defines the “core services’’ as services rendered by IU;
Section 2(13) of the IBC, 2016 defines financial information is nonpublic information with the connection to an individual regarding:
Creditors; who can be financial or operational creditors, debtors, co-applicant, co-borrower, Guarantor, any party which has a connection to debt are required to furnish their financial information to IU.
Any person who is required to submit its information to IU has to enroll him/herself as a user with the IU and provide its identification. For the identification documents required are ;
Further, NeSL will verify the identity and then after user registration will consider being completed. User ID and Password will be created, and then share it with the user through email. Post this; the user can provide the debt information as according to the form C and, shall be signed digitally by the authorized signatory.
The format of submitting the financial information shall be according to the Form- C data input File Format as prescribed by NeSL. For the detailed information regarding the registration, information related to submission kindly refers to the following link. See here: https://nesl.co.in/
Fee Structure for submission of data or any document by the financial or operational creditor for Information Utility is as;
With the above information, we can conclude that such step of storing all the financial information, which is accessible by any authorized person, is virtually providing a platform to stakeholder. During insolvency, the stakeholder can take prudent decisions. The most important aspect is the gathered information by IU will act as a deterrent to an effective resolution. NeSL is believed to be the source of providing the most relevant information about the financial, default and security of any corporate entity.