Insolvency and Bankruptcy Code (Amendment) Bill, 2021 - Important features- Check details here

Finance Minister Nirmala Sitharaman on Wednesday informed about the salient features of the Insolvency and Bankruptcy Code (Amendment) Bill, 2021 and added that Rajya Sabha has passed the bill on Tuesday, August 3, 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," the Office of Nirmala Sitharaman tweeted.

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The features of the Bill are as under:

1. Pre-pack for MSMEs which blends elements and virtues of both formal and informal insolvency proceedings. Under the pre-pack process, a resolution plan is negotiated between the debtor and creditors before formal proceedings start. This combines efficiency, speed, cost effectiveness and flexibility with the binding effect of a formal process.

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)

— NSitharamanOffice (@nsitharamanoffc) August 4, 2021

2. Minimum threshold default of Rs 10 lakh for initiation of pre-pack insolvency resolution process.

3. Initiation with the consent of 66 percent of unrelated financial creditors and special majority of shareholders.

4. 120 days for the entire process.

Other features of the Bill include:
- Minimum threshold default of Rs. 10 lakh for initiation of pre-pack insolvency resolution process
- Initiation with the consent of 66% of unrelated financial creditors & special majority of shareholders
- 120 days for the entire process (3/3)

— NSitharamanOffice (@nsitharamanoffc) August 4, 2021

Also, it can be noted that the Finance Minister will be moving bills in the Rajya Sabha on Wednesday, August 4.

As per a report by IANS, the Bills for consideration and passing in the Upper House on Wednesday include 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.

Sitharaman is also likely to move for consideration the Bill to amend the General Insurance Business (Nationalisation) Act, 1972, as passed by the Lok Sabha. While Civil Aviation Minister Jyotiraditya Scindia is to move the Bill further to amend the Airports Economic Regulatory Authority of India Act, 2008, as passed by the Lok Sabha.