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ARTICLE · 02 APRIL 2020

Threshold Limit Under IBC Enhanced To INR 1 Crore Amidst Coronavirus Crisis

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Provided that the Central Government may, by notification, specify the minimum amount of default of higher value which shall not be more than one crore rupees."

IndiaCoronavirus (COVID-19)
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While addressing the press conference via video conferencing on March 24, 2020, the Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman announced much-needed relief measures in order to prevent triggering of insolvency proceedings against small and medium enterprises that are currently facing the heat of coronavirus pandemic.

The following are the main highlights of the press conference related to ease of doing business for companies in the current situation:

Increase in threshold limit to INR 1 Crore

The significant relief that has been implemented straightaway by the Central Government is that the threshold limit under IBC (Insolvency and Bankruptcy Code) of default under Section 4 of the Insolvency and Bankruptcy Code, 2016 to Rs. 1 crore (from the existing threshold of Rs. 1 lakh), for triggering the Corporate Resolution Insolvency Process (CIRP). The Section 4 of the IBC is reproduced under –

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