The National Company Law Tribunal (NCLT) could see an increase in cases as the annual suspension of the Insolvency and Bankruptcy Code expires next Wednesday. The Department of Coalition will almost certainly increase one luxury next week as India will quickly restore normal business status and be ranked among the top five in the world in terms of vaccinating its citizens, several sources familiar with the matter said.
“The suspension of the implementation of the Automated Corporate Disclosure Process on March 25, 2020 has achieved its purpose and cannot be extended,” said Anil Goel, founder and chairman, of AAA Insolvency Professionals. of change in the current government, and it should not be suspended for long, ”he said.
The Department of Coalition did not respond to ET’s question until the report was published. The six-month suspension was introduced in June due to financial losses or non-payment of debts incurred after a viral outbreak caused by the virus on March 25, 2020. It was supposed to end on September 25 but was extended until December 25. Finally, the leave period was extended by another three months.
There may be a large amount of assets worth Rs 1.8 lakh crore, exposed to NCLT risk, which is spread across many lenders. “Pressure is evident in a recent report on financial stability by the RBI,” said Anil Gupta, vice president and head of sector at ICRA Ratings. “The suspension can be removed but perhaps, with a few tweaks. Small business owners have been facing difficult times since the closure even though the government has upgraded them. ”
Between August and September last year, about Rs 1.80 lakh crore of loans granted to large non-governmental and non-financial sectors delayed payments falling into categories where borrowers failed to pay up to 90 days, known as SMA 0, SMA 1 and SMA 2 with market terminology. The limit for taking any company to NCLT has been identified in the Rs 1 crore, some expect it to be removed. Last June, the North Block provided MSMEs with an unpaid loan of Rs 3 lakh crore outside the Atmanirbhar package. This has covered almost three-quarters of such companies battling bad business conditions.
Some, however, say that MSMEs could use the IBC Code to reorganize financial stress, especially considering their scope, which went into effect on July 1 last year. “It has also emerged that there are a number of errors that occur in the non-existent solution of working and working lenders under the IBC,” Goel said. The MSME limit has been increased to Rs. 250 crore profit last year and planting of plants and equipment or machinery at Rs. 50 crores.