On Saturday, the Rajya Sabha passed the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2020, whereby fresh insolvency proceedings will not be initiated for at least six months starting from 25 March amid the coronavirus pandemic.
Replying to a debate on the Bill in the House, Finance Minister Nirmala Sitharaman said the intention of the IBC is to keep companies a "going concern" and not liquidate them.
The Bill mandates that a default on repayments from 25 March, the day when a nationwide lockdown began to curb the spread of coronavirus, would not be considered for initiating insolvency proceedings for at least six months.
The bill seeks to replace an ordinance promulgated in this regard in June.
IBC was introduced in the parliament in 2015 by the NDA government as a one-stop solution bankruptcy law in India by consolidating the existing framework. The bankruptcy code is a one stop solution for resolving insolvencies which previously was a long process that did not offer an economically viable arrangement. It was intended to protect the interests of small investors and make the process of doing business less cumbersome.