EXAMINING DEFAULT DETERRENCE IN THE INDIAN INSOLVENCY REGIME

The Insolvency and Bankruptcy Code (IBC) aims to resolve insolvency and bankruptcy-related issues in a time-bound and efficient manner. The primary objective of the IBC is to promote a creditor-friendly environment while protecting the interests of debtors, resulting in an increase in the ease of doing business, stimulating credit flow and bolstering investor confidence in the Indian market. The IBC fosters a healthy business environment by enabling the revival of viable businesses and facilitating the exit of non-viable ones. However, certain problems exist in ensuring the goals of this legislation, leading to delayed recovery and default, which is the focus of this framework. To gauge the likelihood of the occurrence of default under the current insolvency regime, we have identified promoting and deterring factors for default. This theoretical framework has been backed by data regarding the factors above from the relevant stakeholders involved in the insolvency process and deterrent measures within the insolvency and bankruptcy code.