The government has notified a new window under the Insolvency and Bankruptcy Code (IBC) to deal with systemically important financial service providers other than banks. The notification says the framework provided under Section 227 of IBC is an interim mechanism.

Till the time a Financial Resolution and Deposit Insurance (FRDI) Bill comes into play, this window will provide a cushion when it comes to finding a resolution in cases of financial service providers. Government officials did indicate that this special window will now empower regulators to take up action when it comes to insolvency resolution proceedings under the IBC for financial service providers.