Government

June 22, 2018

MCA seeks suggestions on introductory note and draft on Cross-Border Insolvency


Insolvency-and-Bankruptcy

As per a circular issued on June 20, 2018, the Ministry of Corporate Affairs (MCA) has invited comments and views from stakeholders on introductory note and draft on Cross-Border Insolvency.

Displaying a high level of interest, the Ministry is keen to introduce a globally accepted and well-recognized cross-border insolvency framework, fine-tuned to suit the needs of aspirational Indian economy. The Government has taken the initiative for Cross-Border Insolvency within the Insolvency & Bankruptcy Code, 2016 (the Code) to provide a comprehensive legal framework.

Notably, inclusion of the cross-border insolvency framework will further enhance “ease of doing business”, provide a mechanism of cooperation between India and other countries in the area of insolvency resolution, and protect creditors in the global scenario. Furthermore, it will make India an attractive investment destination for foreign creditors given the increased predictability and certainty of the insolvency framework.

The move comes at a time when the Indian economy is growing, businesses and trade have adopted an increasingly international character, and India is seeking to attract foreign companies to set up manufacturing facilities in India as part of its Ease of Doing Business and Make in India policies.

The MCA has specified June 30, 2018 as the last date for submitting suggestions.

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