The ministry specified that such exclusion is in line with the design of the Insolvency and Bankruptcy Code ( IBC), where financial service providers are subject to a special insolvency process.
ET has reported about MCA floating fresh draft rules on November 19 to cater cross-border insolvency cases.
It further said that the proposed norms would not be applicable to newly introduced pre-packaged insolvency resolution process deals with small and micro (MSMEs) companies.
Besides, MCA proposed that all benches of National Company Law Tribunal and Debt Resolution Tribunal
may have jurisdiction to adjudicate all such applications.
This implies that cross-border proceedings arising in respect of corporate debtors that have registrations in India will be dealt with at the NCLT bench having jurisdiction over the registered office of the corporate debtor, however, cross-border applications regarding any person incorporated with limited liability outside India may be dealt with by the Principal Bench of NCLT.
MCA has sought public comments on draft cross-border insolvency framework under IBC by December 15, 2021.
Sources say that based on the feedback, the government will try and move a Bill to amend the IBC in the winter session of Parliament starting from November 29.
The proposed norms on cross-border insolvency in line with the recommendations on draft rules, regulations, notifications, guidelines, and capacity building for cross-border insolvency made in the report submitted by Cross-Border Insolvency Rules/ Regulations Committee (‘CBIRC)….
“…enacting legislative provisions on cross-border insolvency is essential to address the emerging issues on cross-border insolvency in recent cases under the Code,” MCA noted
The introduction of a cross-border insolvency law in the IBC, that is in line with international best practices and suitable for the Indian context, may be beneficial to all stakeholders.” it added.