Research Article
Bankruptcy Reforms in India – Progress and Challenges Ahead
@INPROCEEDINGS{10.4108/eai.7-12-2021.2314625, author={Kiran Kumar S and Kavitha D}, title={Bankruptcy Reforms in India -- Progress and Challenges Ahead}, proceedings={Proceedings of the First International Conference on Combinatorial and Optimization, ICCAP 2021, December 7-8 2021, Chennai, India}, publisher={EAI}, proceedings_a={ICCAP}, year={2021}, month={12}, keywords={insolvency bankruptcy india reforms ibc 2016 resolution}, doi={10.4108/eai.7-12-2021.2314625} }- Kiran Kumar S
Kavitha D
Year: 2021
Bankruptcy Reforms in India – Progress and Challenges Ahead
ICCAP
EAI
DOI: 10.4108/eai.7-12-2021.2314625
Abstract
The introduction of the Insolvency and Bankruptcy Code (IBC) in India in 2016 has been viewed a game-changer for the economy. The Code was enacted with an objective to reduce the growing NPA of banks in the country and also to provide a better resolution mechanism for firms in distress. An effective insolvency regime is one that ensures proper treatment for failed entrepreneurs, prefers restructuring to liquidation, has provisions to distinguish an honest debtor from a fraudulent one, enables time-bound resolution, reduces value erosion and maximizes value to all stakeholders. An evaluation of the effectiveness of IBC 2016 against these features shows that the code has its strengths but is burdened due to inadequate infrastructural requirement, overburdened insolvency professionals and undue judicial delays resulting in deterioration in value of assets.