New Delhi, Aug. 28 -- The insolvency court's approval of Zee Group founder and chairman emeritus Subhash Chandra's Rs.6.5 crore repayment plan has raised questions about how much banks can recover from personal guarantors when company loans go bad.

Mint explains what personal guarantor insolvency means, why recovery can still be low, and the nuances in the recent Subhash Chandra case.

What is the law on personal guarantors?

A personal guarantor is someone who vouches for a borrower, guaranteeing repayment of the loan in case of a default. Under the Insolvency and Bankruptcy Code (IBC), personal guarantors can face separate insolvency proceedings. The IBC lays down the definition of a personal guarantor, how creditors can start the proc...