New Delhi, Sept 9 (KNN) Eyeing at addressing the concerns of the Micro, Small and Medium Enterprises (MSMEs) in the country under the Insolvency and Bankruptcy Code (IBC), the IBC Board of India is in the process of formulating a dedicated insolvency framework for the SMEs in the country.

M.S Sahoo, Chairman of the IBBI informed about the latest development during a press interaction.

Sahoo informed that at present the IBC framework primarily focusses on corporate insolvency and there is a need to extend or to come up with alternative framework for the MSME sector.

Sahoo said that while there is an efficient mechanism to deal with corporate insolvency, majority of the Micro and Small Enterprises fail to benefit from the framework as these units do not fall under the definition of the corporate form of business and operations.

In order to address this gap, the IBC board of India is in the process of outlining an individual insolvency structure so that even the tiny and micro units can be covered under the ambit of IBC.

Explaining further, Sahoo said that the implementation for this framework is likely to unfold in two stages. In the first stage the board will be focussing on guarantees to corporates-individuals who have filed guarantees on behalf of the corporates.

This will be followed by the shift in focus towards individuals/tiny enterprises that are operating as proprietorships/partnership or a non-corporate form of business, thus extending the arm of the IBC to the MSME sector.

Earlier, different MSME bodies including the Federation of Indian Micro and Small and Medium Enterprises (FISME) have held various discussions with both the IBC board and the NITI Aayog urging relevant framework for the MSMEs. (KNN/ DA)