Advanced International Journal of Multidisciplinary Research

E-ISSN: 2584-0487   Impact Factor: 9.11

An Open Access Peer Reviewed Multidisciplinary Bi-monthly Scholarly International Journal

Call for Paper Volume 4 Issue 5 September-October 2026 Submit your research before last 3 days of October to publish your research paper in the issue of September-October.

Impact of Insolvency and Bankruptcy Code, 2016 on Corporate Financial Discipline, Credit Recovery and Financial Stability in India

Author(s) Mr. Gaurav Jaiswal
Country India
Abstract The Insolvency and Bankruptcy Code created a structured framework for resolving financial distress, making recovery, resolution time and financial discipline important empirical questions. IBC changed the institutional response to corporate financial distress by creating a structured process intended to improve resolution and recovery. Its effectiveness should be assessed through multiple outcomes: recovery relative to claims, resolution time, preservation of going-concern value, creditor behaviour and financial discipline. Recovery is influenced by asset quality, industry conditions, litigation, creditor structure and timing. Therefore, aggregate recovery figures cannot by themselves establish causal impact. Case-level analysis can test whether resolution duration, claim size, sector and outcome type explain recovery differences. Financial discipline is an important indirect effect. A credible insolvency framework can strengthen lender monitoring and encourage distressed firms to address problems earlier. It can also improve expectations about recoverability and support more efficient allocation of credit. At the same time, delays or institutional capacity constraints can reduce the value preserved through resolution. A case-level dataset using public IBBI information can support regression and survival analysis. The study can compare resolution and liquidation outcomes and test whether longer processes are associated with lower recovery after controlling for case characteristics. The proposed research uses an empirical framework to examine measurable relationships while recognising differences in firm size, sector, professional capability and institutional context. It combines quantitative measurement with appropriate secondary evidence
Keywords insolvency and bankruptcy code; credit recovery; financial discipline; corporate insolvency; financial stability; india
Discipline Other
Published In Volume 4, Issue 3, May-June 2026
Published On 2026-06-07

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