Insolvency board drafts rules for repayment plan
The Insolvency and Bankruptcy Board of India has laid out draft regulations for repayment plan for individuals and firms declaring insolvency. According to the draft regulations, the plan should include among other things the duration of repayment, implementation schedule and a minimum budget for the survival of the debtor and immediate family for the repayment period. The repayment plan must also specify the manner in which funds held for the purpose are to be banked, invested or otherwise dealt with, pending distribution to creditors, as per draft regulations put out for comments.
The draft regulations specify excluded assets, such as unencumbered personal ornaments or house in use by the individual, will not be transferred or sold. Procedures to be followed by creditors and duties of the insolvency resolution professional in carrying out the proceedings for individuals and guarantors have also been laid out.
The working group constituted by the Insolvency and Bankruptcy Board of India has laid out the formula for calculating actual value of a dwelling unit using three methods — rent capitalisation, comparable land and building method.