Q. As per the Insolvency and Bankruptcy Code (Amendment) Bill, 2021, what is the maximum default amount, to which pre-packed resolution is applicable?
Answer: Rs 1 crore
Notes: The Lok Sabha recently passed the Insolvency and Bankruptcy Code (Amendment) Bill, 2021. The Bill will replace the IBC Amendment Ordinance 2021 promulgated in April, which introduced pre-packs as an insolvency resolution mechanism for micro, small and medium enterprises (MSMEs) with defaults up to Rs 1 crore. Under a pre-packaged process, main stakeholders identify a prospective buyer and negotiate a resolution plan before approaching NCLT.