Covid -19 impact: FM Nirmala Sitharaman Raises Insolvency Threshold of Default to Rs 1 Crore for MSMEs

In order to bring some relief to the cash strapped MSME sector amid the Coronavirus pandemic, Finance Minister Nirmala Sitharaman has raised the threshold of default to INR 1 crore from the existing INR 1 lakh to prevent triggering of insolvency proceedings against MSMEs. “This gets implemented straight-away,” the FM said. The Minister also said that they will be watchful of the present situation and will consider suspending Section 7, 9 and 10 of the Insolvency and Bankruptcy Code if the situation persists. “This can stop companies from being forced into insolvency proceedings in such force majeure causes of default,” she categorically stated. Last Updated: 9^th April 2020 This article is contributed by:  Munesh Gaur Manager, Legal