Friday, March 24th, 2023 06:22:09

Parliament passes Insolvency and Bankruptcy Code (Amendment) Bill, 2021

Updated: August 4, 2021 12:42 pm

Parliament  passed the Insolvency and Bankruptcy Code (Amendment) Bill, 2021 with Rajya Sabha approving it yesterday amidst din.The Lok Sabha had already passed the Bill.

The Bill is to amend the Insolvency and Bankruptcy Code, 2016. Insolvency is a situation where individuals or companies are unable to repay their outstanding debt. The Code provides a time-bound process for resolving the insolvency of corporate debtors. The Bill introduces an alternate insolvency resolution process for Micro, Small, and Medium Enterprises (MSMEs), called the pre-packaged insolvency resolution process (PIRP). Application for initiating PIRP may be filed in the event of a default of at least one lakh rupees.

The central government may increase the threshold of minimum default up to one crore rupees through a notification.

Speaking on the Bill, Finance Minister Nirmala Sitharaman highlighted its importance and said the legislation will benefit the MSME sector. She said, the government has brought this bill to support MSMEs which require support in view of COVID pandemic. The Minister objected to the unruly behavior of the opposition members in the House. The House had a brief discussion amid ruckus by the opposition parties. Amar Patnaik of BJD, Banda Prakash of TRS, M Thambidurai of AIADMK, Vijaysai Reddy of YSR Congress and others supported the Bill.

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