Financial Service - Definition / Legal Terminology and Intorduction - Insolvency and Bankruptcy

As per section 3(16) of the Insolvency and Bankruptcy Code, 2016 Financial Service includes any of the following services, namely:- (a) accepting of deposits; (b) safeguarding and administering assets consisting of financial products, belonging to another person, or agreeing to do so; (c) effecting contracts of insurance; (d) offering, managing or agreeing to manage assets consisting of financial products belonging to another person; (e) rendering or agreeing, for consideration, to render advice on or soliciting for the purposes of- (i) buying, selling, or subscribing to, a financial product; (ii) availing a financial service; or (iii) exercising any right associated with a financial product or financial service; (f) establishing or operating an investment scheme; (g) maintaining or transferring records of ownership of a financial product; (h) underwriting the issuance or subscription of a financial product; or (i) selling, providing, or issuing stored value or payment instruments or providing payment services; PRADEEP KUMAR SEKAR- [ 2021 (4) TMI 775 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, CHENNAI] 55. Section 3(14) (a to d) of the Code defines Financial Institution .(including a financial institution as defined in section 45 -I of the Reserve Bank of India Act, 1934. Section 50 of the I B Code, 2016 provides a carve out to a Financial Service Provider for its credit facility to be regarded as extortionate . Likewise, section 167 of the I B Code, 2016 provides that any debt extended by a person regulated for the provision of Financial Services shall not be considered as an extortionate credit transaction . INNOVATORS FACADE SYSTEMS LIMITED- [ 2019 (12) TMI 1406 - NATIONAL COMPANY LAW TRIBUNAL , MUMBAI BENCH] 10. The definition of financial services as defined under section 3(16) of IBC is not limited to 9 activities as shown at clause (a) to (i) of section 3(16). The aforesaid clauses (a) to (i) are inclusive which means there are other services which come within meaning of financial service and in the instant case the certificate of registration issued by the RBI shows that the Corporate Debtor is non-banking financial company prohibited from taking public deposits. Therefore, it is clear that the Respondent being a non-banking financial company and being a financial service provider does not come in the purview of IBC as it is not a corporate person/ Corporate Debtor.