The rules for individual insolvency under the Insolvency and Bankruptcy Code are likely to be notified by December.
"It will come in a phased manner. At this point, we are trying to cover corporate guarantors. That is our main issue. In the first phase, we are dealing with corporate guarantors and individuals having a business like proprietorship firms," Ranjita Dubey, deputy general manager, Insolvency & Bankruptcy Board of India (IBBI), said.
Dubey was speaking on the sidelines of a round table on draft insolvency regulations on individuals and firms organised by the IBBI, in association with ICSI Insolvency Professional Agency and Merchants' Chamber of Commerce & Industry.
Mamta Binani, Chairperson, Standing Committee on Corporate Law & Governance, MCCI, explained that, so far, the Rules were only in respect of the Corporate Insolvency Resolution Process and the rules concerning individuals and partnership firms were due to come.
"The Insolvency and Bankruptcy Board of India constituted a working group to recommend strategy and approach for implementation of the provisions of the IBC, 2016 dealing with insolvency and bankruptcy in respect of guarantors to corporate debtors i.e. personal guarantors and individuals having business, and submit a report along with draft rules and regulations," she said.
IBBI had put up the draft rules online for public comments. The last date for submitting the comments was over, but the board was keeping the window open for further feedback.
Both the rules and regulations for the first phase are expected to be in place by December. A ballpark figure for the number of corporate guarantors would be around 500,000. But not all of them were defaulters.
During the discussion, questions were raised on the amount of Rs 1,000, which was the trigger for initiating insolvency proceedings. Many voiced concerns that the amount was too low. Dubey said that was the feedback received in general and the advisory committee would take a view on it.