When the Insolvency and Bankruptcy Code (IBC) came into force in 2016, it was presented as a legal fix to expedite bankruptcies. It turned out to be much more: a structural reset of incentives that has rebalanced power in Indian business, revived credit markets, and crucially — altered the behaviour of promoters.
At the heart of the Code was a simple, hard-nosed idea: make default costly. Under the IBC, a default can trigger a creditor-controlled resolution process with strict timelines (the ordinary Corporate Insolvency Resolution Process is to be completed in 180 days, with a limited extension window; a fast-track regime for smaller firms runs 90 days, extendable once by 45 days). That penalty loss of control, reputational…