IBC Current Affairs - 2020

CII sets up COVID-19 Rehabilitation and Relief Fund

The Confederation of Indian Industries has set up funds to assist rehabilitation of micro, small and medium enterprises. The fund is to be raised from the members of the confederation.

Highlights

The MSMEs are the most affected sectors due to the outbreak of Corona Virus. This is mainly because of the steps taken to contain the virus like Lock Down, travel bans, closure of theatres, malls and educational institutions.

The GoI has launched several measures to help MSME sustain in the scenario of Lock Down.

GoI Measures

The GoI has allowed late repayment of loans by the MSMEs. The Government will suspend Section 7, Section 9 and Section 10 of the IBC code for six months if the situation is to continue till April 30, 2020.

Section 7

Under Section 7 of the Insolvency Bankruptcy Code, the creditor or the Government may file an application to initiate insolvency procedure.

Section 9

Corporate Insolvencies are initiated under this section

Section 10

The section gives powers to defaulting company to approach an adjudicating authority to declare it insolvent.

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CEA Krishnamurthy Subramanian appointed part-time member in IBBI

Krishnamurthy Subramanian, Chief Economic Adviser (CEA) and B. Sriram, former managing director (MD) and chief executive officer (CEO) of Industrial Development Bank of India (IDBI Bank) were appointed part-time members of Insolvency and Bankruptcy Board of India (IBBI).

K Subramanian, an Indian School of Business (ISB) Hyderabad professor was appointed chief economic adviser for a period of 3 years in December 2018.

Their appointment was approved by Appointments Committee of the Cabinet (ACC), which is composed of Prime Minister of India (who is Chairman), Union Minister of Home Affairs and the order for appointment was issued by Department of Personnel and Training (DoPT).

About Insolvency and Bankruptcy Board of India

  • IBBI, an insolvency regulatory agency was established on 1 October 2016. It was given statutory powers by Insolvency and Bankruptcy Code (IBC), the bankruptcy law of India which was passed by Lok Sabha on 5 May 2016.
  • The IBC 2016 established Insolvency and Bankruptcy Board of India (IBBI), to oversee insolvency proceedings in India and to regulate entities registered under it.
  • The IBBI Governing Board consists of 10 members, including representatives from the Ministry of Finance (MoF), Ministry of Law and Justice, Ministry of corporate affairs (MCA), and Reserve Bank of India (RBI).
  • IBBI act as a regulator for overseeing insolvency proceedings and entities such as Insolvency Professionals (IP), Insolvency Professional Agencies (IPA) and Information Utilities (IU) in India.
  • IBC covers Individuals, Companies, Partnership firms and Limited Liability Partnerships and handles cases under it using tribunals namely National company law tribunal (NCLT) and Debt recovery tribunal (DRT).

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