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FM Sitharaman says threshold for default under IBC norms raised to Rs 1 crore

This is done to ensure MSMEs are insulated from being dragged to the courts on defaults considering the COVID-19 situation.

May 17, 2020 / 04:38 PM IST

Finance Minister Nirmala Sitharaman on May 17 said the goverment will soon bring an ordinance to increase the minimum threshold to initiate insolvency proceedings to Rs I crore from Rs 1 lakh.

This will help insulate the micro, small and medium enterprises (MSMEs) from being dragged to court under the Insolvency and Bankruptcy Code (IBC).

This was part of the fifth tranche of measures Sitharaman announced to revive the flagging economy.

Sitharaman said the special insolvency resolution framework for SMES under Section 240A of the Code will be soon notified.