Partial relief for firms as govt extends IBC suspension for three months

Companies were looking for a six-month extension; suspension doesn't apply to defaults before March 25

The central government has extended the suspension on initiating insolvency and bankruptcy proceedings against firms for three more months till December 24, a notification from the corporate affairs ministry said.

The exemption was introduced through an Ordinance in June, suspending insolvency proceedings against any default arising for at least a six month period starting from March 25. That period came to an end on Thursday.

 “We have the power to increase the suspension up to one year. We would like to see how the situation progresses...We have taken a calibrated approach. You cannot curtail it once it’s extended,” a senior government official