Independent Research and Policy Advocacy

Assessing the Borrower-Level Impact of the Insolvency and Bankruptcy Code: A Study of the Fresh Start Process


The 2016 Insolvency and Bankruptcy Code (IBC) is a landmark legislation with the potential to impact every borrower. This paper focuses on Part III of the IBC, which deals with natural persons, proprietorships, and personal guarantors for corporate debt. Through the paper, we attempt to estimate the potential consequences of the Fresh Start Process (FSP) defined under this Part. The IBC lays out economic criteria that can qualify (or disqualify) an applicant for FSP. Under FSP, a borrower must be asset-lite, have a low income, and hold minimal outstanding debt to qualify. These thresholds determine the applicability of the process once the IBC is fully notified. Thus, empirical estimates regarding the effects of the provisions on the Indian credit market are crucial to deciphering the impact of the IBC, more specifically, the FSP.

Insolvency Law Reform in India

We recently hosted a series of knowledge management sessions at our office, as part of which we had invited Richa Roy of AZB & Partners as one of the speakers.

The Individual Insolvency Framework in India

While the corporate insolvency framework has seen a lot of activity, the individual insolvency framework in India consists merely of a pair of statutes legislated in the British era which today lie dormant for all practical purposes.