Parliament Approves Changes In IBC To Protect Covid-Hit Firms From Insolvency
The bill mandates that a defaults from March 25 won’t be considered for insolvency proceedings for at least six months.
Parliament on Monday approved the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2020, whereby fresh insolvency proceedings will not be initiated for at least six months starting from March 25 in view of the coronavirus pandemic.
Replying to a debate on the bill in the Lok Sabha, Finance Minister Nirmala Sitharaman said the amendments would provide relief to companies reeling under the impact of the coronavirus pandemic.
The bill seeking to replace the Ordinance was later approved by the Lok Sabha. The Rajya Sabha has already approved in the bill on Saturday.
The bill mandates that a default on repayments from March 25, the day when a nationwide lockdown began to curb the spread of coronavirus, would not be considered for initiating insolvency proceedings for at least six months.