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Banks' certificates not must for triggering insolvency

Supreme Court order offers relief to foreign operational creditors who do not have bank account in the country

Banks' certificates not must for triggering insolvency

In a major relief to foreign operational creditors seeking to invoke the Insolvency and Bankruptcy Code, the Supreme Court has held a certificate from a financial institution confirming non-payment of debt was not mandatory for triggering the insolvency process. It further allowed lawyers to issue demand notices on unpaid operational debt on behalf of such creditors. Legal experts said many foreign operational creditors who did not have a bank account in the country faced challenges in procuring a certificate from the financial institutions concerned. “This ...