National e-Governance Services Ltd, to be regulated by the Insolvency and Bankruptcy Board, will store data on borrowing, default and security interest
Mumbai: National e-Governance Services Ltd (NeSL) Tuesday said it has become India’s first information utility (IU) for bankruptcy cases. It will be regulated by the Insolvency and Bankruptcy Board of India (IBBI).
The information utility will store data on borrowing, default and security interest with safeguards like authenticating the terms of contract. It will store the details digitally in a central server.
“Today, IBBI granted it a renewal registration from 25th September, 2017 to 24th September, 2022," said NeSL said in a press statement.
Information with NeSL will serve as evidence for the courts, financial creditors, operational creditors and borrowers about the amount of outstanding debt so that they are able to adhere to the 180-days resolution timeline, S. Ramann, CEO and managing director of NeSL, former executive director of Securities and Exchange Board of India, told Mint. “Many times during court hearings, the facts are contested, the information stored in the IU will serve as a irrefutable proof about the debt levels," he said.
NeSL is owned by State Bank of India, Life Insurance Corporation Ltd, Canara Bank, Bank of Baroda, HDFC Bank, ICICI Bank and Axis Bank, among others. Suvan Law Advisors along with SNG & Partners are the law firms advising NeSL, while Indira Gandhi Institute of Development Research (IGIDR) provides research inputs.
The IU has been formed under Section-313 of the Bankruptcy Code, which will capture the state of debt of an entity when it is still solvent. The information will be accessible to the parties—creditors and borrowers, regulators, insolvency resolution professionals and tribunals. It was set up on the recommendations of Bankruptcy Legislative Reforms Commission as a legal enforceable mechanism on questions of fact.
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