Non Performing Assets — Policy Reforms

Entry	Year	Description	Impact
SARFAESI Amendment Act	2016	Expanded the scope of SARFAESI Act to include security interests created on intangible assets and financial assets. Allowed Asset Reconstruction Companies to sponsor resolution applicants under IBC. Introduced provisions for online databases and centralized registry of security interests.	Enhanced recovery mechanisms by including modern financial instruments and improved transparency through centralized registries, making asset reconstruction more efficient
IBC Amendment Act	2020	Raised the minimum threshold for initiating CIRP from Rs. 1 lakh to Rs. 1 crore to prevent frivolous cases during COVID-19. Introduced pre-packaged insolvency resolution process for MSMEs. Clarified that government dues have priority in liquidation waterfall.	Provided relief to small businesses during pandemic while maintaining the effectiveness of IBC for larger defaults, and clarified government's position in insolvency proceedings