IBBI draft rules require promoters to disclose crypto, foreign assets and more in bankruptcy
April 03, 2026
Under the proposed rule, whether promoters file for bankruptcy voluntarily or are forced into it by their banks, they must now report their ownership of crypto assets, retirement funds, any assets held abroad, as well as all beneficial ownership of assets not in their name.
The Insolvency and Bankruptcy Board of India (IBBI) has issued draft regulations requiring company promoters who have guaranteed corporate loans to disclose their personal wealth during bankruptcy proceedings.
Under the proposal, whether these promoters file for bankruptcy voluntarily or are forced into it by their banks, they must now report their ownership of crypto assets, retirement funds, any assets held abroad, as well as all beneficial ownership of assets not in their name.
The proposal comes from an expert panel of IBBI officials tasked with drafting new regulations under the Insolvency and Bankruptcy Code (IBC), as amended in the recently concluded Parliament session. The amendment bill is awaiting Presidential ascent.
The five-member committee, led by IBBI wholetime member Jayanti Prasad, issued the draft regulations, based on the version of the bill tabled in Parliament last August and the subsequent recommendations of a Lok Sabha select committee that reviewed it, the IBBI report said. Changes necessitated by the final form of the statute will be incorporated when the regulations are notified.
The detailed list of disclosures to be made about personal guarantors’ assets leads to better understanding of the bankruptcy estate, help in getting the right valuation and help to lower the haircut taken by creditors in the resolution plan, explained Anoop Rawat, national practice head, insolvency & restructuring, at Shardul Amarchand Mangaldas & Co.
Data from IBBI showed that since personal guarantors were brought under IBC in December 2019, 4,386 applications have been filed up to end of December 2025. Out of these, 662 were filed by the guarantors involving a debt of close to ₹31,000 crore and 3,724 by the creditors involving a debt of ₹2.86 trillion.
The new rule
The disclosures are mandated by a new regulation 6A to be inserted in the IBBI (insolvency resolution process for personal guarantors to corporate debtors) regulations 2019.
Under these, a true and complete statement of assets of the personal guarantor must be included along with the application filed for personal insolvency resolution, either by the personal guarantor himself or the creditors.
“The list would comprise almost all the assets which a person may hold and importantly, it also requires disclosure of asset over which the individual exercises control, influence, or derives economic benefit, irrespective of legal title,” explained Surendra Raj Gang, partner, deals – debt & special situations, Grant Thornton Bharat.
“Most of the time, personal guarantors would not hold the assets in their own name and would have transferred to relatives or friends but may retain indirect control and hence this proposed amendment is very important and would enable the Adjudicating Authority to take appropriate decision basis all relevant disclosures about assets of the personal guarantor in the personal insolvency application,” said Gang.
Seeking better outcomes
IBBI is actively encouraging lenders to recover funds from promoters and reverse suspicious transactions made during a company’s financial decline. By targeting these questionable deals occurring just before bankruptcy, the regulator aims to claw back diverted value and secure better outcomes for creditors during the debt resolution process.
The move is significant as sharp haircuts suffered by banks and other creditors during debt resolution has been a vulnerable point of IBC, drawing criticism.
Bankruptcy reforms, including the latest round of amendments, have focused on improving efficiency and to prevent any abuse of the IBC process by promoters who try to hide assets away and get out of payment liabilities.
The committee’s 684-page report seeks to revamp the regulatory framework as well as various forms to be used by stakeholders during debt resolution.
Under the proposal, whether these promoters file for bankruptcy voluntarily or are forced into it by their banks, they must now report their ownership of crypto assets, retirement funds, any assets held abroad, as well as all beneficial ownership of assets not in their name.
The proposal comes from an expert panel of IBBI officials tasked with drafting new regulations under the Insolvency and Bankruptcy Code (IBC), as amended in the recently concluded Parliament session. The amendment bill is awaiting Presidential ascent.
The five-member committee, led by IBBI wholetime member Jayanti Prasad, issued the draft regulations, based on the version of the bill tabled in Parliament last August and the subsequent recommendations of a Lok Sabha select committee that reviewed it, the IBBI report said. Changes necessitated by the final form of the statute will be incorporated when the regulations are notified.
The detailed list of disclosures to be made about personal guarantors’ assets leads to better understanding of the bankruptcy estate, help in getting the right valuation and help to lower the haircut taken by creditors in the resolution plan, explained Anoop Rawat, national practice head, insolvency & restructuring, at Shardul Amarchand Mangaldas & Co.
Data from IBBI showed that since personal guarantors were brought under IBC in December 2019, 4,386 applications have been filed up to end of December 2025. Out of these, 662 were filed by the guarantors involving a debt of close to ₹31,000 crore and 3,724 by the creditors involving a debt of ₹2.86 trillion.
The new rule
The disclosures are mandated by a new regulation 6A to be inserted in the IBBI (insolvency resolution process for personal guarantors to corporate debtors) regulations 2019.
Under these, a true and complete statement of assets of the personal guarantor must be included along with the application filed for personal insolvency resolution, either by the personal guarantor himself or the creditors.
“The list would comprise almost all the assets which a person may hold and importantly, it also requires disclosure of asset over which the individual exercises control, influence, or derives economic benefit, irrespective of legal title,” explained Surendra Raj Gang, partner, deals – debt & special situations, Grant Thornton Bharat.
“Most of the time, personal guarantors would not hold the assets in their own name and would have transferred to relatives or friends but may retain indirect control and hence this proposed amendment is very important and would enable the Adjudicating Authority to take appropriate decision basis all relevant disclosures about assets of the personal guarantor in the personal insolvency application,” said Gang.
Seeking better outcomes
IBBI is actively encouraging lenders to recover funds from promoters and reverse suspicious transactions made during a company’s financial decline. By targeting these questionable deals occurring just before bankruptcy, the regulator aims to claw back diverted value and secure better outcomes for creditors during the debt resolution process.
The move is significant as sharp haircuts suffered by banks and other creditors during debt resolution has been a vulnerable point of IBC, drawing criticism.
Bankruptcy reforms, including the latest round of amendments, have focused on improving efficiency and to prevent any abuse of the IBC process by promoters who try to hide assets away and get out of payment liabilities.
The committee’s 684-page report seeks to revamp the regulatory framework as well as various forms to be used by stakeholders during debt resolution.