NBFCs with Rs 500 crore assets can go for insolvency resolution
Updated : November 19, 2019 07:44 AM IST
The Reserve Bank of India (RBI) can now direct resolution of non-banking financial companies (NBFCs) with assets worth at least Rs 500 crore under the insolvency law to help in addressing defaulting cases in the sector, according to a Ministry of Corporate Affairs (MCA) notification.
Last Friday, the ministry had notified the framework for dealing with systemically important financial service providers (FSPs), excluding banks, under the code wherein sectoral regulators can seek resolution of stressed entities.
The introduction of the "generic framework" comes amidst the ongoing liquidity crisis in the NBFCs that has also sparked concerns about the overall stability of the financial sector.