The government has already floated draft framework for pre-packaged insolvency resolution process (PPIRP).
"As you have seen the law of IBC evolved during course of its implementation...pre-packaged insolvency process may also need certain amendment or changes even at the time of formation or post implementation," he said.
As per a draft pre-pack scheme, put out by the corporate affairs ministry, the government may begin by allowing this scheme for defaults from Rs 1 lakh to Rs 1 crore and COVID-19 defaults. This can be followed by defaults above Rs 1 crore, and then defaults up to Rs 1 lakh.
Mehta further said one of the major challenges of the pre-packaged plan would be as to who will be the eligible candidate.
The other challenge would be bringing investors to the company at initial stage of problem rather than when there is a complete disruption, he said at a virtual conference organised by Assocham.
The process has a different evolution matrix, he said, adding, the Insolvency and Bankruptcy Board of India (IBBI) not only worked on several aspects of this segment but also organized series of such awareness programmes especially for the investors.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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