New Delhi, Feb 1 (IANS): The effective cross-border insolvency resolution process framework in IBC would be beneficial for lenders as it would help them recover their dues from defaulting borrowers by disposing of their foreign assets as well as personal assets of their promoters that are parked in offshore locations.

The government has proposed a series of amendments in the Insolvency & Bankruptcy Code (IBC) in order to ensure improved and speedier voluntary winding up of companies, dispute resolution mechanism and enable effective cross-border insolvency resolution framework conducive to enhance efficiency of resolution process.

The Ministry of Corporate Affairs has been mulling to implement an effective framework for cross-border insolvency, which was pending since long.

Daizy Chawla, Managing Partner, S&A Law Offices, said that since announcement has been made in the Budget speech providing the clarity now, it is expected that the cross-border insolvency framework will soon be implemented, hopefully in coming months.

The Insolvency and Bankruptcy Board of India (IBBI) had earlier released a discussion paper during August 2021 seeking comments and recommendations from stakeholders on code of conduct for CoC. Now the other proposal made in the Budget speech is the inclusion of a code of conduct for the Committee of Creditors (CoC), which again is pending since long, in the IBC framework to have solid grip over the decisive panel on insolvency resolution proposals.

These steps will lead to gradual growth of IBC framework and ensure to achieve its overall objectives, Chawla said.

The effective cross-border insolvency resolution process framework in IBC would be beneficial for lenders as it would help them recover their dues from defaulting borrowers by disposing of their foreign assets as well as personal assets of their promoters that are parked in offshore locations, she added.