AN ANALYSIS OF THE EFFECTIVENESS AND CHALLENGES OF THE INSOLVENCY AND BANKRUPTCY FUND UNDER INDIAN LAWS

Abstract

This paper conducts a comprehensive analysis of the effectiveness and challenges faced by the Insolvency and Bankruptcy Fund under Indian laws. The Insolvency and Bankruptcy Code (IBC) was implemented in India to streamline the resolution of insolvency cases and establish a robust insolvency framework. The Insolvency and Bankruptcy Fund plays a pivotal role in facilitating the administration and distribution of funds during insolvency proceedings. This study explores the key provisions of the IBC, highlighting the significance of the Fund in achieving its objectives. It examines the operational mechanisms and financial aspects of the Fund, administered by the Insolvency and Bankruptcy Board of India (IBBI). The effectiveness of the Insolvency and Bankruptcy Fund in expediting the insolvency resolution process and safeguarding stakeholder interests is evaluated. The study assesses the Fund's capacity to efficiently manage and distribute funds, ensuring a transparent and equitable resolution process. Furthermore, it analyses the Fund's impact on promoting entrepreneurship and viable restructuring options for distressed businesses. Several challenges faced by the Insolvency and Bankruptcy Fund under Indian laws are identified. These challenges encompass inadequate infrastructure, delays in the resolution process, legal ambiguities, and concerns regarding the prioritization of claims. The study emphasizes the need for continuous monitoring, evaluation, and improvement of the Fund's operations to overcome these challenges and enhance its effectiveness Based on the analysis, recommendations are proposed to improve the Fund's functioning. These include bolstering infrastructure and technological capabilities, streamlining legal processes, enhancing stakeholder awareness and participation, and fostering an environment conducive to investment and entrepreneurship.