Finance Minister Nirmala Sitharaman speaks in the Rajya Sabha during the ongoing Monsoon Session of Parliament in New Delhi. (Image | The Hindu) It protects defaulting companies from insolvency proceedings for at least six months Context: Both the houses of Parliament passed the Insolvency and Bankruptcy Code (Second Amendment) Bill, which provides that insolvency proceedings against defaulting companies will not be initiated for at least six months starting from March 25. Merits of the amendments to IBC IBC is not a recovery law - The creditors, including MSMEs (micro, small and medium enterprises), had several other options to recover their claims. The proposed amendments, brought in the form of an Ordinance on June 5, suspended the application of three provisions to prevent any company, stressed due to the COVID-19 situation, from being pushed into insolvency proceedings. A provision for further extension of six months has also been given. The initial six-m...
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