Analysis of Cross Border Insolvency in India: A suggestive approach

Authors: Venkata Sai Revanth Rao Maddi & Pranav Deepankar Ketheneni, Students of Alliance University

Best Citation – Venkata Sai Revanth Rao Maddi & Pranav Deepankar Ketheneni, Analysis of Cross Border Insolvency in India: A suggestive approach, Indian Journal of Legal Review (IJLR), 3 (1) of 2023, Pg. 117-127, ISSN – 2583-2344.

ABSTRACT

In India the regulatory body for all the banks i.e. the banking Centre is Reserve Bank of India which is established under Reserve Bank of India Act 1934 under Hilton Young Commission. It regulates all the commercial banks in the state and controls them by giving licenses to involve in the activities of finance. So, basically it is the “banker to the bank”. In its annual report for the year 2020-21 it has stated that almost crores of money in frauds and Insolvency. And almost 74% of citizens of India who are actually directly depositing their sum in banks have never received the money from the banks through which it was lost in frauds and scandals. This is actually not a good sign for a developing country like India where there is population which is middle class is more and the rate of poverty is more at the same time. If there are no such measures taken and adopted in order to cope with such frauds then it would ultimately lead to financial crisis and the citizens who are actually depositing their sums in banks might change their opinion and slowly lose faith in banks. So, if that is the case the RBI will not have any such control on the currency and banks would not be able to maintain Statutory Liquidity Ration.

So, considering this as a point for our research we would like to analyze two major financial Cross border Insolvency scams in India and the loopholes of such undertaking. Accordingly we would even analyze at the same point of the advantages which were being in favour of such Economic offenders. And then conclude our research with the measures in order which can undertake to avoid them through our analysis.

Keywords: Regulator, Statutory Liquidity Ratio, Financial Fraud, Economic Offenders, Insolvency