Moneycontrol
Last Updated : Jun 04, 2020 05:07 PM IST | Source: Moneycontrol.com

Big Story | What are the implications of suspending insolvency filing for 6 months

In this edition of Big Story, Moneycontrol's Sakshi Batra decodes the implication of the move and its impact on the financial sector.

In a breather to corporates facing a cash crunch owing to the novel coronavirus, or COVID-19, led disruptions, the Cabinet has approved a proposal to amend the Insolvency & Bankruptcy Code (IBC) to prevent companies from being forced into resolution proceedings due to loan defaults.

While the move will offer relief to a lot of companies battered by the COVID-19 crisis, the decision may not be good for the banking sector since banks will have to sit on bad assets for a long period. According to rating agency ICRA, this is expected to result in significantly lower realisations up to 30-40 percent for financial creditors in FY21.

In this edition of Big Story, Moneycontrol's Sakshi Batra decodes the implication of the move and its impact on the financial sector.

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First Published on Jun 4, 2020 05:07 pm
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