Rajya Sabha passes Insolvency and Bankruptcy Code Bill, 2020
Rajya Sabha today passed the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2020. It amends the Insolvency and Bankruptcy Code 2016 which provides a time bound process for resolving insolvency in companies and among individuals. Finance Minister Nirmala Sitharaman moved the Bill. Insolvency is a situation where individuals or companies are unable to repay their outstanding debt.
The Bill seeks to temporarily suspend initiation of the corporate insolvency resolution process, CIRP under the Code. It replaces the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020 promulgated in June this year. The Bill provides that for defaults arising during the six months from 25th March of this year, CIRP can never be initiated by either the company or its creditors. The central government may extend this period to one year through notification.