There was great confusion among home buyers about the new Insolvency and Bankruptcy Code introduced in 2016. With different interpretations of the new terms used in the code, buyers found it hard to understand what is financial creditor. I will try to clear the doubt for you.
Who is financial creditor under IBC?
As per Section 5(7) of the Insolvency and Bankruptcy Code, 2016, a financial creditor is '
A person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred'
. In simple terms, a person who has financial debt that was owed to him as per Section 5(8) of IBC is known as a financial creditor.
Get home loans with minimum eligibility criteria at NoBroker! Pay your utility bills and get discounts and instant cashback by using the NoBroker serviceAccording to the Code, financial debt is 'A debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes:
“A debt that is disbursed in consideration for the time value of money, including any interest, and includes:-
Money that has been borrowed and will be returned with interest;
Any amount raised by the acceptance of a credit card or its dematerialized equivalent;
Any money raised through a note purchase facility or by the issuing of bonds, notes, debentures, loan stock, or other similar instruments;
The total amount of any liability deriving from a lease or hire purchase arrangement categorised as a finance or capital lease under The Indian Accounting Standards or other accounting standards as stated;
Other than non-recourse receivables sold, a receivable sold or reduced
Any amount raised by any other transaction, including any forward sale/purchase agreement, with the commercial impact of borrowing;
Any counter-indemnity obligation created by a bank or financial institution’s guarantee, indemnity, bond, recorded letter of credit, or other instruments;
The amount of any obligations arising from any of the guarantees or indemnities for any of the items listed in subclauses (a) through (h).”
This is the meaning of financial creditor. I hope you find this informative.
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Who is financial creditor under IBC?
Akshay
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2022-05-17T11:26:21+00:00 2022-05-30T10:43:04+00:00Comment
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