Bankruptcy deadlines relaxed: IBC activity falling behind during lockdown can be finished later

FINANCIAL EXPRESS

MARCH 30, 2020



Insolvency and Bankruptcy Board of India (IBBI) has announced to exclude the period of lockdown from any IBC activity proceedings. If an IBC activity was to be carried out during the 21 days of lockdown announced by the centre, it can be dealt after 15 April 2020. The decision is taken after considering the difficulty for the insolvency professionals to continue to conduct the process, for members of the committee of creditors to attend the meetings, and for prospective resolution applicants to prepare and submit resolution plans, during the period of lockdown. Thus, it may be difficult to complete various activities during a corporate insolvency resolution process within the specified timeline in the CIRP Regulations.

“To address this difficulty, the IBBI amended the CIRP Regulations to provide that the period of lockdown imposed by the Central Government in the wake of COVID-19 outbreak shall not be counted for the purposes of the time-line for any activity that could not be completed due to the lockdown, in relation to a corporate insolvency resolution process,” IBBI said in a statement. This would, however, be subject to the overall time-limit provided in the Code, it added.

In an earlier announcement, Finance Minister Nirmala Sitharaman had announced to raise the threshold limit to initiate Insolvency and Bankruptcy proceeding to Rs 1 crore from Rs 1 lakh. The decision was aimed at giving relief to small and medium enterprises that are struggling through the tough times of slowdown and lockdown.

Meanwhile, businesses and industries have come to a standstill due to the 21 days’ lockdown and zero footfall in the market. While the demand has floored in the domestic and international markets, disruptions in the movement of goods have made it difficult for businesses to carry on their operations. Many SMEs were already running into losses due to a longer-than-expected slowdown in India, and now the complete lockdown due to the Covid-19 pandemic has shut many shops.



Comments

Post a Comment

Popular posts from this blog

Pakistan's shame: 139 Pakistanis on UN terror list; Hafiz Saeed also named

Business Standard April 05, 2018 Amid its apparent failure to withdraw support and funding to proscribed terrorist organisations, Pakistan is set to be 'grey listed' by the Financial Action Task Force in June. Pakistan continues to be associated with globally-censured terrorists with 139 Pakistani citizens and entities featuring in the United Nations Security Council's (UNSC's) consolidated list of terrorists or terror-supporting organisations. The individuals and entities from the country in the list include Mumbai terrorist attack mastermind Hafeez Saeed's outfit Lashkar-e-Taiba, mafia don Dawood Ibrahim Kaskar and the Haqqanis. The list was released on Tuesday and highlighted names of terrorists who lived in Pakistan, used Pakistani soil for their operations or collaborated with terrorist groups operating from within Pakistan. The list is topped by Osama bin Laden's heir apparent Ayman al-Zawahiri, who was a former operational and military lea...
Read more
 The Telegraph  December 24, 2020 A new, potentially more infectious variant of the novel coronavirus that causes Covid-19 has been found in Britain in cases linked to South Africa, British health secretary Matt Hancock said on Wednesday.  South Africa’s health department said last week that a new genetic mutation of the virus had been discovered and might be responsible for a recent surge in infections there. “Thanks to the impressive genomic capability of the South Africans, we’ve detected two cases of another new variant of coronavirus here in the UK,” Hancock told a media briefing. “Both are contacts of cases who have travelled from South Africa over the past few weeks.”  Britain is already trying to curb the spread of a mutated strain of the virus which is up to 70 per cent more transmissible, and further studies are being carried out on the new variant. “This new variant is highly concerning, because it is yet more transmissible, and it appears to have mutated ...
Read more

CIBIL- SIDBI study: ‘Despite rate cuts & govt push, MSME credit growth slides’

The Indian Express October 17, 2019 Mirroring the deepening slowdown in the economy, commercial lending exposure in the country has declined 2.6 per cent, or Rs 1,70,000 crore, to Rs 63.8 lakh crore in the June quarter of 2019-20 from Rs 65.5 lakh crore in March 2019, said a TransUnion CIBIL- SIDBI study. Despite several rate cuts by the RBI, micro, small and medium enterprises (MSMEs) have recorded a slide in credit exposure. “Entities having less than Rs 25 crore credit exposure have reported a lower credit growth rate of 12 per cent in the year ended June 2019 as against a growth rate of 23.1 per cent last year. Very small segment (less than Rs 10 lakh exposure) have registered a credit growth of only 11.3 per cent in June as against a growth rate of 26.2 per cent last year,” says the study. Of the Rs 63.8-lakh crore commercial lending exposure, micro and SME segments account for Rs 15.7 lakh crore exposure (24.5 per cent of commercial credit outstanding). While mi...
Read more