Updated for 2026 Syllabus Detailed Explanations High-Yield Core Concepts

Bank Promotion Exam Guide

Banking Awareness | Banking Knowledge | for all Bank Exams

Module: General Practice

Q98: What is the primary objective of the "Pre-Packaged Insolvency Resolution Process" (PPIRP) specifically designed for MSMEs?

A
To liquidate MSMEs quickly.
B
To allow the government to take over MSMEs.
C
To provide a faster, cost-effective resolution where the existing management retains control ("Debtor-in-Possession").
D
To waive off all loans of MSMEs.
✅ Correct Answer: C
🎯 Quick Answer:
Faster resolution with Debtor-in-Possession.
Concept Definition: PPIRP is a special insolvency framework under the IBC.
Key Differentiator: In the standard Corporate Insolvency Resolution Process (CIRP), the Resolution Professional takes over management ("Creditor-in-Control"). In PPIRP, the MSME owners stay in charge ("Debtor-in-Possession") while a plan is negotiated.
Causal Reasoning: MSMEs are often dependent on the personal skills and relationships of the owners.
Removing them (as in standard CIRP) often destroys the business value.
PPIRP preserves this value while settling debts.