The Insolvency and Bankruptcy Board of India (IBBI) has invited public comments on draft rules, aiming to improve the corporate insolvency resolution process for personal guarantors.
A personal guarantor acts as a surety of payment for a corporate debtor, and the IBBI’s draft rules propose to strengthen them and introduce safeguards.
Concerns were raised over how creditors in the corporate debtor’s insolvency process did not have any safeguards when even the personal guarantor is insolvent.
To address this, the IBBI proposes amendments to the IBBI (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019. The amendments focus on four issues, including ensuring that a personal…