Rajya Sabha has passed the bill on Insolvency and Bankruptcy amendment, on August 3rd, 2021, and Finance Minister, Nirmala Sitharaman, on Wednesday, has disclosed the salient features of the bill. Office of Nirmala Sitharaman also tweeted, “The Insolvency and Bankruptcy Code (Amendment) Bill, 2021 was passed by the Lok Sabha on July 28 and by the Rajya Sabha yesterday. Salient features of the Bill include Pre-pack for MSMEs which blends elements & virtues of both formal and informal insolvency proceedings,”.
With five members supporting and two opposition members opposing the bill, Rajya Sabha passes the bill in 40 minutes. Five members supporting the bill are Vijay Sai Reddy of the YSR Congress, the BJD’s Amar Patnaik, the TRS’s Banda Prakash, the TDP’s Ravindra Kumar, and the AIADMK’s M. Thambidurai, and two members who opposed the bill are CPI(M)’s John Brittas and CPI’s Binoy Viswam. Lok Sabha passes the bill last week. Bill was moved by Finance Minister Nirmala Sitharaman but due to opposition protests in the parliament, on which she said, “You may have a disagreement, you may protest. However, to disrupt a member who is speaking and surround him in a threatening fashion is absolutely unacceptable”.
Insolvency and Bankruptcy Code (Amendment) Bill, 2021, works for smaller businesses of micros, small and medium enterprises (MSME) sectors, and makes their insolvency process easier and quicker. This bill is an amendment made in the Insolvency and Bankruptcy Code of 2016. Talking about the features of the Amendment Bill, 2021, Nirmala Sitharaman said, “this bill has been brought keeping in mind the situation in which MSMEs require a lot of help post the pandemic..we are increasing the threshold and coming up with a pre-pack.”
After a small debate, Nirmala Sitharaman also said, “I will ensure we are also working to fill the vacancies in the (NCLT) benches. So, I do not want you to worry about vacancies and causing any further delay.” She further added that the pre-package is time-bound and cost-effective, and also flexible which is perfectly suitable for the MSMEs.
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Nirmala Sitharaman office tweeted the features of the IBC (Amendment) Bill 2021, “The Insolvency and Bankruptcy Code (Amendment) Bill, 2021 was passed by the Lok Sabha on July 28 and by the Rajya Sabha yesterday. Salient features of the Bill include:- Pre-pack for MSMEs which blends elements & virtues of both formal and informal insolvency proceedings (1/3)”, “Under the pre-pack process, a resolution plan is negotiated between the debtor & creditors before formal proceedings start. This combines efficiency, speed, cost-effectiveness & flexibility with the binding effect of a formal process. (2/3)” and “Other features of the Bill include:- Minimum threshold default of Rs. 10 lakh for initiation of the pre-pack insolvency resolution process
– Initiation with the consent of 66% of unrelated financial creditors & the special majority of shareholders
– 120 days for the entire process (3/3)”
The Limited Liability Partnership (Amendment) Bill, 2021; The Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill, 2021; Constitution (Scheduled Tribes) Order (Amendment) Bill, 2021; The Airports Economic Regulatory Authority of India Amendment) Bill, 2021, The General Insurance Business (Nationalisation) Amendment Bill, 2021, are some of the bills which are to be considered and passed by the Upper House of the Parliament.