Personal guarantors' insolvency resolution, experts said, is an opportunity to balance debtor relief with creditor recovery, but its trajectory leans on debtor leniency.
"Providing avenues for debtors to rehabilitate themselves financially is understandable, but the dismal 2.16 per cent recovery rate indicates a systemic flaw.
Emphasis on approving repayment plans without scrutiny or enforcement mechanisms risks undermining creditor confidence and perpetuates a moral hazard," said Sonam Chandwani, managing partner, KS Legal & Associates.
The IBBI data shows of the 383 admitted personal guarantors' insolvency processes, 124 have been closed. Of these 12 have been withdrawn, 86 have been closed because repayment plans were not submitted or rejected, and for 26 the repayment plan has got approval.
Denne historien er fra May 22, 2024-utgaven av Business Standard.
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Denne historien er fra May 22, 2024-utgaven av Business Standard.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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A life that lives beyond
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Love-all, RAFA
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