MUMBAI: The Insolvency and Bankruptcy Board of India (IBBI) is expected to step up its drive against defaulters by allowing lenders to act against high-profile individuals, including promoters of many companies, who have given personal guarantees to corporate loan defaulters.The eight-member body will meet on Friday to discuss changes in regulations that will allow assets of personal guarantors to be encashed and used for repayment of debt via separate proceedings at the National Company Law Tribunal ( NCLT ), said two people familiar with the plan.Personal guarantors who may have escaped action in the NCLT process will no longer be immune to action by creditors. A working committee of insolvency professionals had submitted recommendations on such changes to IBBI a month ago.The committee felt that such action will enable quicker aggregation of assets of defaulters and guarantors. The IBBI governing board will discuss the recommendations and is likely to approve them.Insolvency and Bankruptcy Board chairman MS Sahoo declined to comment on the agenda of Friday’s meeting.Once the regulations are finalised by IBBI and the government notifies them, lenders will be able to directly move against personal guarantors of companies facing insolvency proceedings. The lenders can start attaching financial assets and seize properties, and make these a part of the final settlement.Current rules don’t permit such action. “In most of the large default cases filed with NCLT, the promoters are the guarantors,” said Manoj Kumar, partner at Corporate Professionals. “Individual insolvency would be another blow to truant promoters seeking the escape route.”To illustrate this, let’s assume a company is facing NCLT proceedings. With the expected change in regulations on individual insolvency, the company’s corporate guarantor (mostly promoters) can be dragged to separate NCLT proceedings.His assets could be encashed to repay the debt while leaving some funds aside for daily needs.IBBIis changing rules to help revive distressed assets within a stipulated time and also ensure there is little scope for the process to be manipulated. Some of the other recommendations of the working committee include introduction of a cadre of debt counsellors, provision for mediation in small cases, making district courts the adjudicating authority in place of debt recovery tribunals to provide easy access to residents of smaller towns that are not served by NCLTs.“The lenders may see it as an additional tool to pressure promoters to pool in personal assets to discharge their liabilities as guarantors,” said Sumant Batra, managing partner at Kesar Dass and Associates, and a member of the working group.While NCLT functions under the Insolvency and Bankruptcy Code , the tweaking of rules by IBBI would help facilitate quicker resolution with individuals connected to corporate defaults also being covered by the system.“Implementing provisions of individual insolvency could be the next big change under IBC after the latest ordinance,” said Anil Goel, founder, AAA Insolvency Professionals.