Categories: Business

cabinet okays ordinance to amend insolvency law for default due to covid 19

Photo: SOCIAL MEDIA

proposal to suspend IBC proceedings for defaults due to Covid

new Delhi. The Union Cabinet on Wednesday gave its approval to bring an ordinance to amend the Insolvency and Bankruptcy Code (IBC). Through this amendment, no new action will be initiated under the Insolvency Act against a company failing to pay the bank loan due to the Kovid-19 epidemic. Sources have given this information. Sources say that failing to pay after March 25, action will not be taken for some time under the insolvency process. A nationwide lockdown was initiated in the country from the day of 25 March. Sources said that the ordinance for the amendment of IBC has been approved by the Cabinet.

According to sources, three sections of the Code will be suspended. This suspension of sections will be for six months to one year. According to sources, the Cabinet has approved a competent provision in this regard, while the period for which these sections will be kept suspended will be decided by the Ministry of Corporate Affairs. According to him, cases where there is no epidemic reason for default in payment and the application for insolvency process before March 25 will be settled under the IBC Code.

This post was published on June 4, 2020 1:06 am

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