M. S. Sahoo is the Chief of the Bankruptcy Law Insolvency and of Bankruptcy Board of India. He Announced a special resolution framework for MSMEs is being Prepared.
Important Points :
In COVID – 19 crisis Government of India suspended several provisions of Insolvency and Bankruptcy Code (IBC). In this framework Included exemption of COVID – 19 related debts. The Gol approved the IBC Amendment Ordinance, 2020. In this announcement, companies prevent from being pushed into insolvency. Another important point is the section 7,9 and 10 of IBC were suspended. The Bankruptcy Code of Insolvency also provides time-bound resolve insolvency.
What is the Problem ?
According to the Reserve Bank, IBC, which accelerated the resolution, is now reducing it. This will have an adverse effect mainly on MSMEs. According to the Financial Stability Report (FSR) released by the Reserve Bank, by March 2020, NPAS could increase to 14, to 1 percent. The FSR has been issued by the Reserve Bank once in June or July and twice a year from 5% in March 2020.
Reference : www.gktoday.in