IBBI Directs Liquidator To Make Certain Declaration When Financial Service Provider Undergoes Voluntary Liquidation
The Insolvency and Bankruptcy Board of India has issued a circular dated 13.02.2024, intimating that when a Financial Service Provider undergoes voluntary liquidation under IBC, then the Liquidator shall declare that: the category of Financial Service Providers has been notified by the Central Government under Section 227 of IBC, and the corporate person has obtained prior permission from the appropriate regulator. Section 227 read with the Insolvency and Bankruptcy Rules, 2019 allows FSPs who have been notified by the Central Government, after consulting financial regulators, to undergo a voluntary liquidation process after obtaining prior permission of the appropriate regulator. It has been noted that some FSPs have commenced the voluntary liquidation process without notification and / or prior permission of the appropriate financial regulator. Compliances for initiation of Voluntary Liquidation of a Financial Service Provider The IBBI has directed that the liquidators to ensure that if the corporate person falls under the category of financial service provider, it shall declare that: the category of Financial Service Providers has been notified by the Central Government under section 227 of IBC, and the corporate person has obtained prior permission from the appropriate regulator.
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