The starting point
Part II of the Code covers the insolvency and liquidation of corporate debtors. A "corporate person" includes a company under the Companies Act, 2013 and an LLP (section 3(7)), so a company or LLP incorporated for the IFSC is within it. Part II applies where the default is at least the minimum amount notified by the Central Government (section 4). The Adjudicating Authority is the bench of the National Company Law Tribunal with territorial jurisdiction over the place where the registered office is located (section 60(1)). For a company with its registered office in GIFT IFSC, that is a bench with jurisdiction over Gujarat.
A branch is different. It is part of a foreign company, and its insolvency is in the first place a matter for the foreign company's home proceedings, with Indian assets and creditors to be dealt with in India.
The financial service provider question
The definition of corporate person excludes any "financial service provider" (section 3(7)). That is a person providing financial services under an authorisation or registration granted by a "financial sector regulator" (section 3(17)). The Code names the RBI, SEBI, IRDAI and PFRDA, and such other regulators as the Central Government notifies (section 3(18)). Financial service providers can be brought into the Code only by notification under section 227.
IFSCA is not named in section 3(18), and we have not found a notification adding it or a section 227 notification for IFSC entities. Whether an IFSCA-registered bank, finance company, fund manager or intermediary is a financial service provider is therefore not settled, and IFSCA's role in an insolvency should be confirmed for the entity type. An IFSC company that holds no authorisation or registration from a financial regulator is not a financial service provider on any reading, and falls within the ordinary process.
The 2026 amendments
The Insolvency and Bankruptcy Code (Amendment) Act, 2026 received assent on 6 April 2026. MCA's notification of 22 May 2026 brought it into force from 26 May 2026, except the provisions on:
- group insolvency (new section 59A, which lets the Central Government prescribe how proceedings against two or more group companies are conducted);
- cross-border insolvency (new section 240C, which lets the Central Government prescribe recognition of proceedings, relief and judicial cooperation for notified countries);
- the creditor-initiated insolvency resolution process (new Chapter IV-A, for classes of corporate debtors to be notified); and
- the Insolvency and Bankruptcy Fund.
Among the provisions now in force, an Explanation to section 3(31) clarifies that a security interest exists only where it is created by agreement between parties, not merely by operation of law.
Cross-border recognition
Many IFSC entities have foreign creditors, foreign assets or a foreign parent. Until rules under section 240C are made and brought into force, the Code's cross-border tools are limited: the Central Government may enter into reciprocal agreements with other countries (section 234), and a resolution professional or liquidator may ask the Tribunal to issue a letter of request to a foreign court where assets are in a reciprocating country (section 235). Recognition of an Indian process abroad depends on the foreign country's law. Plan for this in the documents: governing law, security location and the jurisdiction of each obligor.
In practice
- Creditor rights. Register charges, since an unregistered charge is ignored by a liquidator (section 77(3), Companies Act). Keep claims documentation ready for a resolution professional.
- Regulator consent. A resolution plan that changes control of an IFSCA-regulated entity will usually need IFSCA's approval under the activity framework, and SEZ approval for changes in shareholding. See fit and proper.
- Client and investor assets. Segregated client assets and scheme assets are not the entity's own; documents should make that plain.
- Aircraft. Aircraft objects are carved out of the moratorium. See security and enforcement.
- Solvent exits follow a different path. See exit.
The Corporate Laws (Amendment) Bill, 2026, still before Parliament, would clarify that a compromise or arrangement under the Companies Act is not allowed once liquidation has begun under the Code.