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[Breaking] Debts Incurred Due To COVID-19 Not To Be Treated As 'Default' For IBC; No Fresh Insolvency For A Year : Finance Minister

LIVELAW NEWS NETWORK
17 May 2020 6:31 AM GMT
[Breaking] Debts Incurred Due To COVID-19 Not To Be Treated As
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Nirmala Sitharaman, Union Minister of Finance and Corporate Affairs, on Sunday announced that debts incurred due to COVID-19 lockdown will not be treated as "default" under the Insolvency and Bankruptcy Code 2016.

There will be an embargo on fresh insolvency proceedings will be initiated for a period up to one year, depending on the pandemic situation.

Minimum threshold to initiate insolvency proceedings will be raised to Rs 1 crore from the Rs 1 lakh.

For MSMES, a special insolvency framework will be notified under Section 240A IBC, added the Finance Minister.

The Minister said that an appropriate Ordinance will be brought in for effecting these changes.


Also Read : Technical Defaults Under Companies Act To Be Decriminalized : Finance Minister


 



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