Submission of Financial Information to Information Utility

WRITE-UP FOR SUBMISSION OF FINANCIAL INFORMATION TO NATIONAL E-GOVERNANCE SERVICES LIMITED, INFORMATION UTILITY

1) BACKGROUND – ABOUT THE NATIONAL E-GOVERNANCE SERVICES LIMITED (NeSL), INFORMATION UTILITY (IU):

NeSL is India’s first Information Utility and is registered with the Insolvency and Bankruptcy Board of India (IBBI) under the aegis of the Insolvency and Bankruptcy Code, 2016 (IBC). The Company has been set up by leading Banks and Public Institutions and is incorporated as a Union Government Company.

2) ROLE OF NeSL:

NeSL is a Credit Repository which shall:

a. Accept financial information from financial creditors and operational creditors;

b. Financial information will get authenticated by all the parties of the debt and store to be used as evidence in the legal process;

c. Provides a platform for the creditors and debtors-submission and authentication;

d. NeSL, IU is a Cost-effective tool for –

• • Proof of Borrower;
  • Proof of borrowing;
  • Proof of Security interest; and
  • Proof of Default.

3) LEGAL REQUIREMENT FOR SUBMISSION OF FINANCIAL INFORMATION TO INFORMATION UTILITY (IU) BY FINANCIAL CREDITOR:

Reserve Bank of India Notification DBR.No.Leg.BC.98/09.08.019/2017-18 dated December 19, 2017:

Applicable to all Non-Banking Financial Companies (NBFCs)

According to Section 215 of Insolvency and Bankruptcy Code (IBC), 2016, a financial creditor shall submit financial information and information relating to assets in relation to which any security interest has been created, to an information utility (IU) in such form and manner as may be specified by regulations.

All financial creditors regulated by RBI are advised to adhere to the relevant provisions of IBC,2016 and IBBI (IUs) Regulations, 2017 and immediately put in place appropriate systems and procedures to ensure compliance to the provisions of the Code and Regulations.

So, we have registered CNHi Capital IN November 2018 and started filing the information with effect from April, 2019.

Who are Financial Creditors?

A “Financial Creditors” is defined under Section 5(7) of IBC-

Any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred to”.

4) NCLT Order dated 12^th May 2020 – Filing of Records of Default (RoD) is now mandatory to Information Utilities:

NCLT order dated 12^th May 2020 makes mandatory for all concerned to file default records from Information Utility along with the new Petition being filed under Section 7 – Intimation of Corporate Insolvency Resolution Process by Financial Creditors under IBC 2016. No new Petition shall be entertained without record of default under Section 7 of IBC, 2016.

For this, all the Financial Creditors must first submit the default information on the Information Utility and then download the RoD (Record of default) once the process of authentication of default is completed.

5) NATURE OF FINANCIAL INFORMATION TO BE SUBMITTED:

“Financial Information” is defined under Section 3(13) of IBC as under:

“financial information”, in relation to a person, means one or more of the following categories of information, namely: —

a) records of the debt of the person;

b) records of liabilities when the person is solvent;

c) records of assets of person over which security interest has been created;

d) records, if any, of instances of default by the person against any debt;

e) records of the balance sheet and cash-flow statements of the person; and

f) such other information as may be specified.

6) FORMAT FOR SUBMISSION OF FINANCIAL INFORMATION:

Financial Information is required to be submitted in Form C – Data Input File prescribed and published by the NeSL, IU.

7) FILING REQUIREMENT – FEES FOR SUBMISSION OF INFORMATION:

8) CONSEQUENCES OF NON-FILING OF THE FINANCIAL INFORMATION:

PUNISHMENT: If any person contravenes any of the provisions of this Code or the rules or regulations made thereunder, such person shall be punishable with fine which shall not be less than One Lakh rupees, but which may extend to Two Crore rupees.

9) TIMELINE FOR PAYMENT OF FEES TO NeSL, IU:

Since, NeSL is a Micro, Small and Medium Enterprises (“MSME”) registered under the MSMED Act, 2006, the payment shall be made within 45 days from the date of receipt of Invoice.