Page 30 - Banking Finance July 2022

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Insolvency and Bankruptcy Code, 2016, ensuring quicker, cost-
Micro enterprise Investment in Plant and Machinery
effective and value-maximizing outcomes for all the
or Equipment: Not more than Rs.1
stakeholders, in a manner which is least disruptive to the
crore and Annual Turnover not
continuity of their businesses. It is considered expedient to
more than Rs. 5 crore.
introduce a pre-packaged insolvency resolution process for
Medium Enterprise Investment in Plant and Machinery
corporate persons classified as micro, small and medium
or Equipment: Not more than Rs.10
enterprises," the IBC ordinance 2021.
crore and Annual Turnover not
The minimum default threshold of Rs.10.00 lakh, which has more than Rs. 50 crore
been prescribed for initiating the process, would provide Small enterprise Investment in Plant and Machinery
much respite to MSMEs by enabling them to have access to or Equipment: Not more than Rs.50
an effective resolution process under the pre-pace process. crore and Annual Turnover not
This would not have been otherwise feasible under the
more than Rs. 250 crore
Corporate Insolvency Resolution Process owing to enhanced
default threshold of Rs.1.00 crore. Prepack Insolvency
Sector wise Asset Quality:
Resolution Process would work on debtor in possession model
Among the broad sectors, asset quality improved noticeably
and as such would enable the MSMEs to resolve their stress
in the case of industry, agriculture and services in September
as a going concern.Revised composite criteria is investment
in Plant and Machinery/equipment and Annual Turnover as 2020 over March 2020, with a decline in GNPA and stressed
per the revised definition of MSME. advances ratios.

Gross NPA Ratio of Major Sub-Sectors within the industry

30 | 2022 | JULY | BANKING FINANCE