Insolvency of Financial Service Providers

A non-banking financial company is a company in every ordinary sense. Under the Insolvency and Bankruptcy Code, it is not a corporate person — and that single exclusion changes everything about how its stress is resolved and what its lenders can do. Financial service providers sit outside the Code by design. They re-enter it only through Section 227, and only to the extent the Central Government notifies them — today, NBFCs and housing finance companies at or above ₹500 crore in assets, with the Reserve Bank of India as the appropriate regulator. Inside that framework, only the regulator can file, an Administrator replaces the resolution professional, the licence survives the process, and the regulator holds a veto over who controls the entity afterwards. The harder question is what happens to the people who signed personal guarantees. The Code defines a personal guarantor as a guarantor to a corporate debtor. If the principal borrower is an FSP, and therefore not a corporate debtor, tribunals have taken conflicting views on whether Section 95 proceedings against the guarantor are maintainable at all — and a February 2026 NCLAT ruling has added a further twist by fixing FSP status to the date of the underlying transaction rather than the date of filing. This session brings together practitioners who have worked inside these processes to map the framework, the case law and the practical drafting and filing choices that follow from it.