Published Online:January 2025
Product Name:The IUP Journal of Accounting Research & Audit Practices
Product Type:Article
Product Code:IJARAP020125
DOI:10.71329/IUPJARAP/2025.24.1.21-40
Author Name:Geeta Singh
Availability:YES
Subject/Domain:Finance
Download Format:PDF
Pages:21-40
The Indian credit system has been critiqued for poor and unpredictable enforcement mechanisms, delayed resolution processes, and lowest recovery rate of bankruptcy resolution. The paper explores and analyzes the existing literature to understand the impact of the Insolvency and Bankruptcy Code (IBC), an act implemented in India in 2016 to overcome the shortcomings of the credit system of the country. It explores various dimensions of IBC, through its impact on many firm-level decisions, including debt, dividend, cash level, etc., based on the data procured from existing literature extracted from Scopus. Based on the extant literature, the study performs an empirical analysis of the impact of IBC on the accounting and market performance of Indian firms. The findings report that IBC has led to improved firm performance, especially for the distressed firms. These results are supported by the enhanced access to credit and reduced cost of debt following IBC.
The introduction of the Insolvency and Bankruptcy Code (IBC) in 2016 has led to a significant transformation in the Indian credit system. This act aims to establish a framework for insolvency, restructuring, and bankruptcy procedures for Indian firms.