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Insolvency Proceedings To Be Suspended Up To A Year, “COVID-19 Debts” Not To Be Considered As Default

Insolvency Proceedings To Be Suspended Up To A Year, “COVID-19 Debts” Not To Be Considered As Default

Finance Minister Nirmala Sitharaman relaxed IBC norms on Sunday

The government on Sunday announced that debts related to coronavirus pandemic not to be included in default category under Insolvency and Bankruptcy Code (IBC) for one year. Besides, it was also announced that an ordinance will be passed to ensure that no fresh insolvency proceedings are initiated for up to one year, depending upon the pandemic situation.

Moreover, it was announced that the minimum threshold for initiating IBC proceedings against micro, small and medium-sized enterprises (MSMEs) has already been raised from Rs 1 lakh to Rs 1 crore.

The announcements were made by Finance Minister Nirmala Sitharaman while briefing the press on the fifth and final tranche of economic measures under the Atma Nirbhar Bharat Abhiyan package. Ms Sitharman also said that these measures will further enhance ease of doing business in the country.



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