`IBBI needs to quickly provide for cross border insolvency`

New Delhi: The Insolvency and Bankruptcy Board of India (IBBI) needs to quickly put in place the framework for cross border insolvency since many cases also involve foreign creditors, says a study.

The joint study by industry body Assocham and consultancy EY said the existing provisions of the Insolvency and Bankruptcy Code may not be adequate to deal with matters related to overseas creditors.

IBBI is implementing the code.

"The code does not make any distinction between domestic and foreign creditors, and therefore both categories of creditors would have equivalent rights.

"However, it is not explicitly mentioned whether the representatives of foreign insolvency proceedings and creditors would have a right of access to the courts...," the study said.

It also noted that there are no specific provisions in the code on how Indian authorities will give or seek assistance to or from foreign authorities.

"Cross-border insolvency has not been defined in the Code, but in general it may be understood as insolvency of borrowers who have assets or creditors in different jurisdictions or are subject to insolvency proceedings in multiple jurisdictions," it added.