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Defaults related to COVID-19 to be exempted from IBC for upto 1 year: FM Sitharaman

Sitharaman also said the minimum threshold to initiate insolvency proceedings has been raised to Rs 1 crore.

May 17, 2020 / 03:35 PM IST

Finance Minister Nirmala Sitharaman on May 17 said debts related to COVID-19 will be excluded from the "default" category under the Insolvency and Bankruptcy Code for a period of upto 1 year.

Sitharaman also said the minimum threshold to initiate insolvency proceedings has been raised to Rs 1 crore from Rs 1 lakh, which will insulate micro, small and medium enterprises (MSMEs).

This could mean that the Centre will have to amend Section 7, 9 and 10 of the IBC, possibly through an Ordinance to enable the suspension.

Follow our LIVE blog for updates on FM Sitharaman's press conference
No fresh insolvency proceedings will be initiated upto one year, depending upon the pandemic situation, Sitharaman added.