Kanara Chamber suggests amendment in IBC to benefit MSMEs

Mangaluru, Oct 6 (KNN) In the interest of MSMEs, the Kanara Chamber of Commerce and Industry (KCCI), Mangaluru has requested the central government to alter the Insolvency and Bankruptcy Code (IBC), 2016.

It has also urged to include MSMEs under Clause (b) of sub-section 1 of Section 53 on par with the workmen’s dues, reported The Hindu.

M. Ganesh Kamath, President of KCCI has sent a letter to Union Minister for Finance Nirmala Sitaraman regarding the suggestion.

“The special schemes initiated by the government have been much appreciated as they have provided timely finance and assistance to MSMEs,” he said in the letter.

Kamath highlighted how MSMEs not having resources or the expertise to analyse their customers’ creditworthiness results into no chance of recovering their dues.

“As a result, MSMEs believe such entities would honour their commitment and have the capability of meeting their financial obligations. In such a situation, MSMEs have little bargaining power in dealing with corporate customers,” he said. 

In the interest of the MSMEs, there is an imperative need for the Insolvency and Bankruptcy Code, 2016, to be amended by giving preference to MSMEs in the waterfall mechanism of distribution of assets.

It is generally felt that MSMEs should be included in clause (b) of sub-section 1 of Section 53 and brought on par with the workmen’s due.

These benefits should be available for all the pending cases before the NCLT and National Company Law Appellate Tribunal (NCLAT), the letter said.  (KNN Bureau)