NEW DELHI: The Lok Sabha on Thursday gave its nod to the new bankruptcy code, which aims to defuse the crisis of the looming bad loans in the banking sector.The bill, which was passed by a voice vote, may face rough weather in the Rajya Sabha next week, given the ongoing heated exchanges between the government and the opposition over the Agusta Westland helicopter deal.Minister of State for Finance Jayant Sinha said the government intends to enter into cross-border treaties to confiscate overseas assets of wilful defaulters and recover dues of banks, a reflection on some of the high-profile cases, including Vijay Mallya’s now defunct Kingfisher Airlines.According to the government data, top 50 defaulters of public sector banks had exposure in excess of Rs 1.21 lakh crore as on December 2015.Sinha observed that the Insolvency and Bankruptcy Code 2016 was transformational and will help the country to improve its rankings in the World Bank survey on ease of doing business.On wilful defaulters, Sinha said bankruptcy framework and the normal procedure against them would continue in a parallel manner.“There would be one law dealing with bankruptcy while doing away with at least 12 different legislations, some of which are centuries old. This will make the whole process more transparent,” he added.Responding to a query on whether the new legislation would help in taking the overseas assets of wilful defaulters, Sinha said in this regard first cross-border treaties need to be put in place.“We have to make cross-border treaties. We have to have an understanding with other nations that we are taking action on this defaulter,” he said.He added that when India has a good law like this in which the other nations will be clear that by due process of law we are taking action, then they will also believe us and they will cooperate with us in attaching the assets and properties in their countries.According to Sinha, India has already discussed the matter with other countries. “They have said that when we have such a law, then such attachments and confiscation will be easily done...this law will help,” he added.The key features of the code include hastening debt recoveries and restructurings by setting a deadline of 180 days to decide the fate of a company that defaults. If 75% of creditors agree on a revival plan, that term can be extended by 90 days. Else, a firm would be automatically liquidated.