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IBC budget session may come for faster resolution, cross-border norms

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bankruptcy And the Bankruptcy Code (IBC) may soon get some strengthening, including measures to expedite the cross-border insolvency framework and resolution of cases, a matter to be taken up in the coming days. Budget Parliament session, government insiders said.

Proposed legislative changes also include a code of conduct for the committee of creditors (COC) who decides on insolvency resolution proposals.

Sources said the proposed cross-border insolvency law would pave the way for lenders to include foreign assets of an insolvent entity in their recovery proceedings, including offshore personal assets of promoters, where they have offered personal guarantees, Sources said.

A senior official said the draft law incorporates the feedback of stakeholders and the recommendations of the Parliamentary Standing Committee. “With all relevant considerations incorporated, we are now in a better position to formulate a regulation,” the person told ET.

Ministry of Corporate Affairs (MCA), which is in the process of finalizing the bill, is expected to roll out the arrangement with some safeguards from the next financial year, officials said.

According to him, cross-border law would be broadly in line with the International Model Law provided by the United Nations Commission on International Trade Law which creates a basic framework for cooperation between domestic and foreign courts.

.The law will allow courts in countries that have adopted model law to execute orders against defaulters.

At least 50 countries, including some advanced economies, are in the process of adopting the model law. “By adopting this, we will automatically get access to all those countries and there is no need for a separate agreement with them,” the official quoted above said.

However, the regulation would have certain conditions that would protect the public interest views of foreign courts, he said. Sources said the proposed law would not apply to companies in the critical sector. He said that some key strategic areas can also be kept out of its purview.

quick resolution

Certain changes are under consideration in the Corporate Insolvency Resolution Process (CIRP) under the IBC to make it more robust and reduce delays so that it can prevent further fall in the value of stressed firms.

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Hassaan Minhas

Hassaan is a journalist at and he deals with Latest News, India News, and Tech News. Hassaan is a very professional and authentic news journalist.

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