IBBI proposes four CIRP-style safeguards for personal guarantor insolvency — related parties to get nil vote, mandatory valuation; comments closed on 3 October 2026
An IBBI discussion paper proposes four amendments to the regulations for insolvency resolution of personal guarantors to corporate debtors: nil voting share for related parties of the guarantor, examination and reporting of avoidance transactions, valuation of the guarantor’s assets by a registered valuer, and recording of creditors’ reasons on the repayment plan. These are proposals only. The last date for comments was 3 October 2026, which has passed.
Key facts
- In force
- Proposal only — comment period ended 3 October 2026
- Who it affects
- Personal guarantors to corporate debtors, their creditors and related parties, resolution professionals, registered valuers
- What it is
- Comments invited
- Section
- Insolvency
- Published
- 12 September 2026
In 30 seconds
- This is a discussion paper; nothing in it is law yet. IBBI proposes to make regulations after considering comments.
- Proposal 1: a related party of the guarantor, as defined in section 5(24A) of the Code, to have a “Nil” voting share on the repayment plan.
- Proposal 2: new regulation 10A — the resolution professional to examine and report undervalued, defrauding, preference and extortionate credit transactions (sections 164, 164A, 165, 167).
- Proposal 3: new regulation 10B — a registered valuer to determine the fair value and realisable value of the guarantor’s assets.
- Proposal 4: new regulation 15(2A) — creditors’ deliberations and reasons to be recorded in the minutes.
- Last date for comments: 3 October 2026 — now over.
हिंदी में सार
IBBI ने एक चर्चा-पत्र में व्यक्तिगत गारंटरों की दिवाला समाधान प्रक्रिया के लिए चार बदलाव प्रस्तावित किए हैं: गारंटर के संबंधित पक्ष (related party) को शून्य मताधिकार, संदिग्ध लेनदेन की जाँच और रिपोर्ट, पंजीकृत मूल्यांकक से संपत्ति का मूल्यांकन, और पुनर्भुगतान योजना पर लेनदारों के कारणों को कार्यवृत्त में दर्ज करना। यह केवल प्रस्ताव है, अभी लागू नहीं। टिप्पणियाँ भेजने की अंतिम तारीख़ 3 अक्टूबर 2026 थी, जो निकल चुकी है।
Status: a proposal, not a rule
The Insolvency and Bankruptcy Board of India has issued a discussion paper titled “Strengthening safeguards in the Insolvency Resolution Process for Personal Guarantors to Corporate Debtors”. It solicits comments on draft amendments to the IBBI (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 (the IRP Regulations). After considering the comments, the Board proposes to make regulations under section 196 read with section 240 of the Code. Nothing has been decided.
The paper gives the last date for comments as 3 October 2026. That date has passed.
Why IBBI is proposing this
The paper says a review of the personal guarantor framework alongside the corporate insolvency resolution process (CIRP) shows four respects in which safeguards available to creditors of a corporate debtor have no counterpart for a personal guarantor, though the underlying concern is the same.
The four proposals
| # | Gap identified | Proposed amendment |
|---|---|---|
| 1 | An “associate” of the guarantor is barred from voting, but that definition is much narrower than “related party”; a related party may vote on the plan that decides how far the guarantor is discharged | Regulation 9(1): the list of creditors to indicate separately whether each creditor is a related party under section 5(24A). Regulation 11(2): proviso that the voting share of such a related party shall be Nil |
| 2 | The resolution professional has no duty at the resolution stage to examine avoidance transactions, unlike in CIRP | New regulation 10A: examine and record whether the guarantor was party to a transaction under section 164, 164A, 165 or 167, place the findings before the meeting of creditors, and take the action that would be available had a bankruptcy order been passed |
| 3 | The IRP Regulations do not provide for valuation of the guarantor’s assets | New regulation 10B: appoint a registered valuer to determine fair value and realisable value under valuation standards notified by the Board; the report to reach creditors before the repayment plan is considered under regulation 17A |
| 4 | Minutes record who voted for, against or abstained, but not the creditors’ own assessment | New regulation 15(2A): record the creditors’ deliberations and reasons, having regard to six listed factors |
What creditors would have to weigh
Under the draft regulation 15(2A), the minutes would reflect: the claims admitted and the amount proposed to be paid; the duration of the plan and the certainty of payments; the guarantor’s assets and liabilities, including the fair and realisable values; the guarantor’s income and future repayment capacity; any transaction or conduct bearing on recovery, including those found under regulation 10A; and the feasibility and viability of the plan.
Where the amount proposed is significantly lower than the admitted claims or the estimated realisable value of the guarantor’s assets, the resolution professional would specifically record why the creditors consider the plan preferable to a bankruptcy process.
What readers should do
The comment window closed on 3 October 2026. Guarantors, creditors and insolvency professionals should watch for the regulations IBBI makes after considering the comments. Until then, the existing IRP Regulations continue to apply as they stand.
Questions and answers
Has IBBI changed the rules for personal guarantor insolvency?
No. This is a discussion paper with draft amendments. IBBI proposes to make regulations only after considering public comments.
What was the last date for comments?
The paper gives 3 October 2026 as the last date for submission of comments. That date has passed.
Who would lose the vote on a repayment plan?
The paper proposes that a creditor who is a related party of the guarantor, as defined in section 5(24A) of the Code, be assigned a Nil voting share.
Would valuation become compulsory?
It is proposed that the resolution professional appoint a registered valuer to determine the fair value and the realisable value of the guarantor’s assets, with the report placed before the creditors along with the repayment plan.
What would the resolution professional have to check about past transactions?
Whether the guarantor has been a party to an undervalued transaction (section 164), a transaction defrauding creditors (section 164A), a preference transaction (section 165) or an extortionate credit transaction (section 167), with findings placed before the meeting of creditors.
Published 12 September 2026. Updated 6 October 2026. This report is for general information and is not professional advice. Read the source document before acting on it.