New Delhi, Sept. 14 -- The Insolvency and Bankruptcy Board of India (IBBI) has proposed tighter safeguards for insolvency proceedings involving personal guarantors to corporate debtors, including removing voting rights of related-party creditors, mandatory valuation of guarantors' assets and greater scrutiny of transactions that could reduce recoveries for lenders.

In a discussion paper issued on September 12, the regulator proposed amendments to the insolvency resolution process for personal guarantors, seeking stakeholder comments by October 3.

Related Parties to Lose Voting Rights

IBBI has proposed that related parties of a personal guarantor be assigned a 'nil' voting share in creditors' deliberations on a repayment plan.

At prese...