The Ministry of Finance has suspended the fresh initiation of insolvency proceedings up to one year depending upon the COVID-19 pandemic situation.
The Minister for Finance and Corporate Affairs said that, Minimum threshold to initiate insolvency proceedings raised to Rs. 1 crore from Rs. 1 lakh, which largely insulates MSMEs.
The Central Government will also introduce the Special insolvency resolution framework for MSMEs under Section 240A of the Code to be notified soon.
The Finance Minister also said that, the Government to exclude COVID-19 related debt from the definition of “default” under the Code for the purpose of triggering insolvency proceedings.
