Nudging in IBC: Behavioral Perspective
Author(s):
Dr.R.Lakshmi
Keywords:
IBC, Exit mechanism, ease of doing business, default, behavioral principle , Nudge
Abstract
The enactment of Insolvency and Bankruptcy Code (IBC) was an economic reform in India. The code came into force from 2016.The enactment of IBC was a major reform in the corporate world. The IBC structured and focused on the exit mechanism for corporates and ease of doing business in India. The code welcomed a cultural shift in many aspects of businesses. We can consider that the code is emerging as a behavioral law with the intention to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of value of assets of such persons, to promote Entrepreneurship, availability of credit and safeguard the interests of all the stakeholders. The code is leveraging default rules, which is a behavioral principle given the anchoring bias of individuals by providing default choices to the economic agents such as maximizing their welfare and the society as well. The word nudge has captured in the corporate world and nourishing to accelerate the advance of behavioral science into the corporate mainstream. As nudge units growing up in the private sector, they are helping companies to promote change and increase productivity.
Article Details
Unique Paper ID: 154495

Publication Volume & Issue: Volume 8, Issue 11

Page(s): 308 - 311
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