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Insolvency and Bankruptcy Code Bill
Why is it in news?
- The Lok Sabha passed the Insolvency and Bankruptcy Code (Second Amendment) Bill.
- It was earlier passed by the Rajya Sabha.
Details:
- The Bill provides that insolvency proceedings against defaulting companies will not be initiated for at least six months starting from March 25.
- The creditors, including MSMEs (micro, small and medium enterprises), had several other options to recover their claims.
- The proposed amendments will help to prevent any company, stressed due to the COVID-19 situation, from being pushed into insolvency proceedings.
- A proviso for further extension of six months has also been given.
- The initial six-month period would end on September 24.
About Insolvency and Bankruptcy Code (IBC):
- The Code offers a uniform and comprehensive insolvency legislation encompassing all companies, partnerships and individuals.
- It suggests two options:
(1) Restructuring if the firm is viable.
(2) Liquidation if the firm is not financially viable.
- Regulator under IBC: The Insolvency and Bankruptcy Board of India (IBBI).