The Union Cabinet on Wednesday approved key amendments to the Insolvency and Bankruptcy Code (IBC) Bill which may have a direct impact on the country’s real estate sector and its stakeholders.According to one of the amendments, financial creditors will now have to meet an additional threshold to take a company to bankruptcy court. For real estate, the Bill specifically stipulates that insolvency action can be initiated only if 10%, or 100 homebuyers (whichever is lower) or debenture holders, agree to the move.“Additional thresholds introduced for financial creditors represented by an authorized representative due to large numbers in order to prevent frivolous triggering of Corporate Insolvency Resolution Process (CIRP),” a government release said.The amendment assumes significance as a number of cases have been reported in the recent past where a single homebuyer has approached the National Company Law Tribunal (NCLT) invoking provisions of the IBC.In a related development, the Cabinet also approved small but significant tweaks in the partial credit guarantee scheme announced in Budget 2019 to improve liquidity for cash-starved non-banking financial companies (NBFCs) and housing finance companies (HFCs).Public sector banks will now be allowed to buy ‘BBB+’ rated assets of NBFCs and HFCs as well… Read full this story
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