Coronavirus-related debts to be excluded from defaults under IBC

New Delhi [India], May 17 (ANI): Corporate debts related to COVID-19 pandemic will be excluded from default category under the Insolvency and Bankruptcy Code (IBC) for a period of up to one year, Finance Minister Nirmala Sitharaman said on Sunday.

At the same time, the minimum threshold to initiate insolvency proceedings has been raised from Rs 1 lakh to Rs 1 crore.

To enable these, Sitharaman said the government will need to amend Section 7, 9 and 10 of the IBC through an ordinance.

Besides, a special insolvency framework will be enacted to insulate micro, small and medium enterprises (MSMEs) from being taken to court under the IBC.

The Finance Minister made the announcements as part of the fifth tranche of measures to revive the faltering economy. (ANI)