Wealth managers, i-bankers, insurance brokers & share transfer agents may soon be brought under IBC

Representative Image - Bankruptcy

The Centre will bring soon bring 30-40 financial intermediaries, including wealth managers, insurance brokers, merchant bankers and share transfer agents, under the scope of the Insolvency & Bankruptcy Code (IBC), reports The Times of India.

Till date, only non-banking financial institutions (NBFCs) with assets over Rs 500 crore are under IBC purview and the Centre continued to exclude banks, insurance companies and pension funds, the paper said.

SEBI Chairman Ajay Tyagi on November 21 said mutual funds will be part of the list. Regulators were recently asked to identify intermediaries under them, which would be brought under IBC in case of a crisis. The insurance and pension regulators will soon identify entities as well.

These developments come on the back of a prolonged crisis in India’s financial sector, which also lacks targeted and specific law provisions.

Another alternative, the Financial Resolution & Deposit Insurance (FRDI) Bill, was withdrawn for fears that depositor monies would be used to offset company distress. Further, FRDI’s market-focused provisions makes it inapplicable to banks, insurance underwriters and pension funds, it added.

The plan is to raise the insurance cover for deposits over the present Rs 1 lakh bar, a source told the paper. This would also be in line with Finance Minister Nirmala Sitharaman’s comments on the same last week.