IBBI Introduces Wider Asset Disclosure Requirements For Personal Guarantors
The Insolvency and Bankruptcy Board of India (IBBI) has amended the insolvency resolution and bankruptcy frameworks governing the personal guarantors to corporate debtors. The changes mandate a comprehensive asset disclosure and lay down a mechanism to facilitate asset transfers in related corporate insolvency proceedings.
The changes came into force from June 1, 2026, through the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) (Amendment) Regulations, 2026, and the IBBI (Bankruptcy Process for Personal Guarantors to Corporate Debtors) (Second Amendment) Regulations, 2026.
The amendments insert Regulation 6A, which requires personal guarantors to furnish a complete and true statement of all assets when initiating insolvency proceedings under Section 94 of the Insolvency and Bankruptcy Code.
However, where a creditor initiates an insolvency process against a personal guarantor under section 95, it must provide information related to the guarantor's assets only to the extent available to it.
The disclosure obligation extends to cash in hand, bank deposits, digital wallet balances, business interests, domestic and overseas investments, all rights and titles in immovable property, retirement funds, and benefit schemes.
It also includes the disclosure of cryptocurrencies and other digital assets, intellectual property rights, precious metals, and other valuable movable assets, agricultural assets, insurance claims, along with claims under litigation or arbitration, and beneficial ownership interests.
The regulation clarifies that the statement of asset disclosure must cover assets not only owned by the individual but also held indirectly or jointly with others, or through various arrangements that confer control or economic benefit. (Regulation 6A(2)).
Another key feature of the amendments is the imposition of a statutory duty of coordination between the resolution professionals of the Personal Guarantor undergoing the insolvency process and the Corporate Debtor to facilitate the transfer of assets undertaken for the purposes of Section 28A of the Code. The RP is required to obtain approval from the meeting of the creditors before any such transfer. (Regulation 11A).
Similar obligations have been imposed on the bankruptcy trustees of the Personal Guarantor to coordinate with the RP of the Corporate Debtor and take mandatory approval from the meeting of the committee of creditors. (Regulation 20A)
Approved transfers must be appropriately disclosed in reports filed under the Code and applicable regulations. (Regulation 11A(3) and Regulation 20A(3)).
Both amendments additionally provide for more administrative flexibility by replacing fixed statutory forms with those that the Board will now notify through official circulars.