Information Utilities 101 And A Primer On Compliance With RBI's Dec. 19, 2017 Notification On Information Utilities

The Reserve Bank of India on December 19, 2017, issued a notification directing all financial creditors to submit financial information and information relating to assets in relation to which any security interest has been created to the National E-Governance Services Ltd, which is India's first registered information utility. Financial information in relation to a person has been defined under sub-section 3 of Section 13 of the Code to mean "one or more of the following": " Records of the debt of the person; Records of liabilities when the person is solvent; Records of assets of person over which security interest has been created; Records, if any, of instances of default by the person against any debt; Records of the balance sheet and cash-flow statements of the person; and Such other information as may be specified." "Financial debt" has been defined under sub section 8 of Section 5 of the Code to mean:- "A debt alongwith interest, if any, which is disbursed against the consideration for the time value of money and includes— Money borrowed against the payment of interest; Any amount raised by acceptance under any acceptance credit facility or its de-materialized equivalent; Any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; The amount of any liability in respect of any lease or hire purchase contract which is deemed as a finance or capital lease under the Indian Accounting Standards or such other accounting standards as may be prescribed; Receivables sold or discounted other than any receivables sold on nonrecourse basis; Any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing; Any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price and for calculating the value of any derivative transaction, only the market value of such transaction shall be taken into account; Any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter of credit or any other instrument issued by a bank or financial institution; The amount of any liability in respect of any of the guarantee or indemnity for any of the items referred to in sub-clauses to of this clause." Therefore, prima facie, it can be concluded that even foreign lenders qualifying as financial creditors, are required to submit financial information to an IU in compliance with sub-section of Section 215 of the Code.