Extended Suspension of IBC May Lead to Riskier Behaviour Among Firms

Even as the Centre has temporarily suspended the Insolvency and Bankruptcy Code (IBC) due to the current economic crisis following the Covid-19 pandemic, academicians have highlighted the threat of a possible surge in riskier behaviour of firms under extended immunity from the IBC, Business Line reported. Earlier this month, the Centre had issued an ordinance to suspend initiation of fresh insolvency proceedings against defaults arising on or after March 25 for a period of one year. The decision came after the Finance Ministry expressed its intent to provide economic relief amid the Covid-induced economic crisis. Read more

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