Failure to repay home loans might drag future defaulters to dedicated bankruptcy courts as New Delhi is seeking to put in place a broad framework on individual insolvency two years after it revamped such laws for stressed companies.
Three sets of entities will fall under the individual insolvency code. They would include the personal guarantor to corporate debtors, proprietary firms and other individual borrowers, M S Sahoo, chairman of the Insolvency and Bankruptcy Board of India (IBBI), said Friday.
“The work is progressing, but I cannot comment on any timelines,” said Sahoo.
According to a market source ET spoke with, the insolvency rules to recover bad loans from individuals could only come after the impending general elections.
Sahoo was in Mumbai to launch a bespoke academic programme – the first of its kind the world – that would graduate 40 insolvency professionals annually. ET had reported on January 15 about this programme.
The Indian Institute of Corporate Affairs (IICA) has launched the Graduate Insolvency Programme (GIP) for individuals aspiring to join the profession anywhere in the world.
“Even NCLT judges and professionals across industries will come to take classes,” said Sumant Batra, managing partner of Kesar Dass B & Associates, a Delhi-based firm that is a member of the working group linked to the programme.
Individuals are currently allowed to act as insolvency professionals if s/he has 10 years of post-membership experience as a chartered accountant, company secretary, cost accountant or advocate, or 15 years of management experience after a bachelor degree.
Source: Economic Times