Centre amends insolvency law

PTI

New Delhi

Seeking to provide relief for corporates, the government on Friday promulgated an ordinance to amend the Insolvency and Bankruptcy Code whereby fresh insolvency proceedings will not be initiated for at least six months starting from March 25 amid the coronavirus pandemic.

Default on repayments from March 25, the day when the nationwide lockdown began to curb coronavirus infections, would not be considered for initiating insolvency proceedings for at least six months.

The move is expected to provide relief for corporates as the pandemic and subsequent lockdowns have significantly impacted economic activities.

However, proceedings can be initiated for defaults made before March 25.

Insolvency proceedings would not be initiated for “any default arising on or after March 25, 2020 for a period of six months or such further period, not exceeding one year from such date, as may be notified in this behalf,” the ordinance said.