India: Financial Services

A May 2026 ruling has clarified that corporate guarantees backed by security qualify as 'financial debt' under Section 5(8) of the Insolvency and Bankruptcy Code. This article analyses the legal reasoning, its implications for resolution applicants, financial creditors, and corporate groups, and the broader impact on insolvency restructuring and credit markets in India.

Airline insolvency presents a particularly difficult problem for insolvency law because the assets most critical to keeping the airline operational may not belong to the airline at all. Aircraft are frequently held under operating leases. When an airline enters insolvency, therefore, the resolution professional (“RP”) may be required to preserve the corporate debtor as a going concern while the aircraft lessor seeks to enforce its contractual and international-law rights to recover possession of its aircraft.

The Change in Law clause is a cornerstone of competitively bid power projects in India. It protects parties against unforeseen legislative and regulatory changes that alter the economic assumptions on which bids are submitted. The central objective is restitution: restoring the affected party to the same economic position as if the change had never occurred. Yet, in practice, Change in Law compensation under Power Purchase Agreements (PPAs) is often determined and paid years after the expenditure has been incurred.

The Reserve Bank of India (“RBI”) issued a circular consolidating and rationalising the existing framework governing Special Rupee Vostro Accounts (“SRVAs”) used for settlement of crossborder transactions in Indian Rupees. The circular supersedes earlier instructions issued between 2022 and 2025 and brings the applicable provisions relating to the opening, funding, utilisation, investment, documentation and reporting of SRVAs into a consolidated framework.

Securities and Exchange Board of India (SEBI) in its recent informal guidance dated 20 July 2026 (Informal Guidance), has clarified that Regulation 62A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (LODR Regulations), applies to outstanding unlisted non-convertible debentures, which was are transferred to a debt listed entity pursuant to any corporate restructuring or business transfer.

If your company is required to spend on Corporate Social Responsibility (“CSR”) under the Companies Act, 2013 (“Act”), a new and structured route is now available, effective from May 27, 2026. The Ministry of Corporate Affairs (“MCA”) has amended the Companies (Corporate Social Responsibility Policy) Rules, 2014 (“CSR Rules”) to permit companies to direct a portion of their CSR budget through the Social Stock Exchange (“SSE”) via Zero Coupon Zero Principal (“ZCZP”) instruments. This update is of direct relevance to compliance teams, CSR committees, company secretaries, and in-house counsel.

On 24 July 2026, the Central Board of Direct Taxes issued a comprehensive Guidance Note to assist Reporting Crypto-Asset Service Providers in complying with the dedicated reporting framework under the Income-tax Act, 2025 and the Income-tax Rules, 2026 for reporting crypto asset transactions.

In a significant move to deepen foreign participation in India’s sovereign debt market, the Government of India promulgated the Income-tax (Amendment) Ordinance, 2026 on 5 June 20261, introducing a comprehensive tax exemption for eligible foreign investors investing in Government securities. Effective retrospectively from 1 April 2026, the Ordinance exempts specified income arising from Government securities from withholding tax and long-term capital gains tax, thereby addressing one of the principal tax-related barriers to foreign investment in Indian debt markets.

The intersection of structured finance and insolvency law continues to generate significant judicial discourse, particularly on the question of when a financial creditor ceases to be a mere lender and becomes a related party of the corporate debtor. A recent ruling by the National Company Law Tribunal, New Delhi Bench, in Rishi Gupta and Anr. v. IDBI Trusteeship Services Ltd. and Ors. offers important clarity on this issue.