View: An urgent need for a cross-border insolvency framework

Guarantees issued are usually for the loans raised by subsidiaries where the company availing the loan does not meet the requisite financial parameters. Thus, the assets situated abroad would have counter guarantee in India. The guaranteeing company may or may not have the funds to honour the guarantee and in case of a liquidity crunch will encounter a potential insolvency.

from Economy-News-Economic Times https://ift.tt/3lDGFCN