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Raising threshold for insolvency: Good for NCLT, bad for smaller creditors

Experts are of the view that a substantial increase in threshold might affect certain sectors severely

NCLAT's nod to Sterling Biotech for settlement with lenders baffles experts

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A view within the MCA is that in cases where the amount of bad loan is not significant, lenders should look for other options before invoking the IBC

Akanshha Agarwal

4 min read Last Updated : Mar 16 2020 | 9:50 AM IST

The Insolvency and Bankruptcy Code, 2016, (IBC) currently prescribes the threshold of Rs 1 lakh for invoking insolvency proceedings under the law. The Ministry of Corporate Affairs, however, has been for some time considering increasing the threshold requirement to reduce the number of filings before the National Company Law Tribunal (NCLT).

While the Insolvency Law Committee has recommended increasing the threshold to Rs 5 lakh, the government is reportedly looking at raising the bar to Rs 50 lakh. Experts are of the opinion that any increase in threshold needs a twofold analysis. While they agree with the government’s view that

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