New Regulations Mandate Disclosure of Personal Assets for Promoters and Directors of Stressed Companies During Bankruptcy Resolution

Key Requirements Include Reporting of Crypto, Luxury Goods, and Foreign Assets

New Regulations Require Personal Guarantors to Disclose Wealth Amid Bankruptcy Resolutions

In a significant move aimed at enhancing transparency in bankruptcy proceedings, the Insolvency and Bankruptcy Board of India (IBBI) has proposed draft regulations that will require promoters and directors who have provided surety for a stressed company’s debt to declare their personal assets. This includes a wide array of holdings such as cryptocurrencies, jewelry, artworks, high-end watches, and foreign assets.

The new regulations, developed by a five-member panel led by IBBI’s wholetime member Jayanti Prasad, are designed to align with the forthcoming Insolvency and Bankruptcy Code (Amendment) Bill, 2025. Under these guidelines, personal guarantors—whether they have filed for bankruptcy voluntarily or have been compelled by creditors—will be mandated to disclose their wealth across a dozen categories.

Comprehensive Asset Disclosure

The proposed asset categories encompass both tangible and intangible assets, reflecting the IBBI’s commitment to tightening disclosure requirements. These categories include:

• Cash and bank deposits
• Business interests and commercial assets
• Domestic and overseas investments
• Immovable property
• Retirement and provident fund assets
• Digital assets, including cryptocurrencies and non-fungible tokens (NFTs)
• Intellectual property and intangible assets
• Valuable movable assets
• Agricultural assets and livestock
• Receivables and advances
• Claims and contingent assets
• Employee stock options and beneficial ownership interests

This comprehensive approach ensures that even assets indirectly owned or controlled by personal guarantors are included in the disclosure. A senior IBBI official noted that this provision addresses concerns that many guarantors may not hold assets directly in their names.

A Response to Rising Bankruptcy Cases

Since personal guarantors were brought under the IBC framework in December 2019, a staggering 4,386 applications have been filed as of December 2025. Of these, 662 applications were submitted by the guarantors themselves, involving a debt of ₹30,949 crore, while creditors filed 3,724 applications for a total debt of ₹2.55 lakh crore.

The proposed regulations aim to make the “statement of assets” disclosure mandatory by introducing a new section—6A—in the Insolvency Resolution Process for Personal Guarantors to Corporate Debtors Regulations, 2019. This move is expected to streamline the bankruptcy resolution process and reduce the backlog of cases.

Enhancing Accountability

The IBBI’s initiative comes amid growing concerns over accountability in corporate governance. By requiring personal guarantors to disclose their wealth, the regulations aim to foster a culture of transparency and responsibility, ensuring that those who back corporate debts are held accountable for their financial commitments.

As the draft regulations move forward, stakeholders in the corporate sector are closely watching how these changes will impact the landscape of bankruptcy resolutions in India. The emphasis on comprehensive asset disclosure marks a pivotal step towards a more accountable and transparent financial ecosystem.