Issues & Drawbacks of the Existing Insolvency and Bankruptcy Code, 2016

This paper seeks to examine several drawbacks of the Insolvency and Bankruptcy Code 2016 in India. The identified issues include delayed resolution, a low default threshold for initiating insolvency proceedings, a creditor-centric approach, inadequate involvement of operational creditors, strict time limits for resolution, unclear qualifications for Insolvency Resolution Professionals (IRPs), insufficient infrastructure for handling insolvency cases, and concerns regarding the Insolvency and Bankruptcy Fund etc. This paper is also represents overview of the Insolvency and Bankruptcy Code (IBC) of 2016, and its dynamic framework that revolutionized the country's insolvency and bankruptcy landscape. The primary objective of the IBC is to consolidate and streamline the various laws and regulations dealing with insolvency and bankruptcy, providing a unified platform to address financial distress, both for individuals and corporations. This paper is also highlights insolvency and bankruptcy provisions of developed countries like USA, Australia which will be need for the adoption in insolvency and bankruptcy code of India, such provision as out-of-court workouts, cross-border insolvency cooperation, and debtor-in-possession financing, to enhance its insolvency resolution system and address these issues effectively.