India

Rajya Sabha passes Insolvency and Bankruptcy Code (Second Amendment) Bill, 2020

New Delhi: The Rajya Sabha on Saturday passed the Insolvency and Bankruptcy Code, 2016 (Second Amendment) Bill on Saturday.

As per the amendment fresh insolvency proceedings will not be initiated for at least six months starting from March 25 amid the coronavirus pandemic.

Replying to the questions, Finance Minister Nirmala Sitharaman said, “Our intention of initiating corporate insolvency for matters that occurred during the lockdown, was to give immunity during this period. This is only for those which arrive during the COVID period, amendment of section 66 that no obligation shall be filed by a resolution professional.”

“If the company is pushed into insolvency, when it is recovering from losses, the objective of the ordinance will be lost. The IBC is not a recovery law. Saving the lives of companies is important, more than the recovery of loans which may be utilised through other options,” she said.

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