Module: General Practice
Q93: Under the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2021, a specialized "Pre-Packaged Insolvency Resolution Process (PPIRP)" was introduced specifically for MSMEs. What is the minimum default amount required to initiate this process?
✅ Correct Answer: C
The Central Government specified Rupees 10 Lakh as the minimum default amount for initiation of PPIRP for corporate MSMEs.
This distinguishes it from the standard CIRP (Corporate Insolvency Resolution Process), where the minimum default threshold is generally Rupees 1 Crore (raised from Rupees 1 Lakh to prevent petty triggers). To make the resolution process accessible for smaller MSMEs, the threshold for Pre-Pack was kept lower at Rupees 10 Lakh.
PPIRP is available only for defaults up to Rupees 1 Crore.
If the default exceeds Rupees 1 Crore, the MSME must undergo the standard CIRP.
This distinguishes it from the standard CIRP (Corporate Insolvency Resolution Process), where the minimum default threshold is generally Rupees 1 Crore (raised from Rupees 1 Lakh to prevent petty triggers). To make the resolution process accessible for smaller MSMEs, the threshold for Pre-Pack was kept lower at Rupees 10 Lakh.
PPIRP is available only for defaults up to Rupees 1 Crore.
If the default exceeds Rupees 1 Crore, the MSME must undergo the standard CIRP.