The NCLT’s approval of the repayment plan for Subhash Chandra relates specifically to his liability as a personal guarantor and does not amount to banks writing off 99.97% of Rs 22,006 crore in loans, sources said. 
The Rs 22,006 crore represents claims admitted against Chandra in his capacity as personal guarantor for loans taken by several Essel and Zee-linked companies. It does not represent money personally borrowed by Chandra. 
Under the approved plan, creditors are expected to recover around Rs 6.25 crore from Chandra’s personal estate. However, the principal corporate borrowers continue to remain liable for their outstanding debt. The repayment plan also envisages payments of around Rs 1,494 crore by these borrowers, apart from Chandra’s personal contribution. 
According to the facts outlined in response to reports on the case, only around Rs 2,574 crore of the admitted claims relate to loans for which Chandra had provided a personal guarantee when the original borrowing took place. Most of the remaining guarantees were provided later as additional security. 
The reported 99.97% haircut, therefore, applies to the amount recoverable from Chandra as a personal guarantor and should not be treated as a 99.97% loss on the entire Rs 22,006 crore of bank loans. 
The insolvency proceedings against Chandra began after he had provided a personal guarantee for a loan given by Indiabulls to Vivek Infracon. After the loan defaulted, creditors initiated insolvency proceedings against Chandra in his capacity as guarantor. 
The repayment plan was approved with the support of 80.81% of creditors by voting share. Lenders including LIC Housing Finance, HDFC Bank, Axis Bank, Canara Bank, RBL Bank and Union Bank opposed the plan. The NCLT, however, held that the objections were not sufficient to overturn the resolution approved by the required creditor majority. 
Creditors continue to have recovery options against the principal borrowers, securities and other assets available with the companies. 
The low level of personal recovery was also questioned by creditors, who referred to historical net-worth certificates showing Chandra’s net worth at around Rs 45,888 crore in 2017 and Rs 40,562 crore in 2018. This was compared with his presently disclosed net worth of around Rs 31.79 crore, prompting creditors to seek closer scrutiny of his assets. 
Chandra has also stated that the companies have so far paid around Rs 43,000 crore to creditors. 
The case is consequently a resolution of Chandra’s personal-guarantor liability and should not be described as a settlement or write-off of the entire debt owed by the underlying Essel and Zee-linked companies. 
Sources also said the Chandra case is an exceptional personal-guarantor resolution and should not be considered representative of corporate insolvency recoveries under the Insolvency and Bankruptcy Code (IBC). 
Data cited in the response shows that creditors recovered around Rs 4.32 lakh crore through approved resolution plans up to March 2026. These recoveries amounted to 116.85% of liquidation value and 94.56% of fair value. 
Since the IBC was introduced, more than 32,000 cases have also been settled before admission into insolvency proceedings, involving assets worth around Rs 14 lakh crore. These settlements indicate that borrowers have often settled cases after insolvency applications were filed but before they were formally admitted. 
The financial position of scheduled commercial banks has also improved, with net non-performing assets declining from 5.94% in March 2018 to 0.48% in September 2025. In absolute terms, net NPAs fell from around Rs 5.2 lakh crore to Rs 94,000 crore during the period. 
Citing an IIM Ahmedabad study, sources said companies resolved through insolvency recorded 76% growth in sales, 50% growth in total assets, 50% growth in employee expenses and 130% growth in capital expenditure. 
The distinction in the Chandra case is important because the Rs 6.25 crore recovery relates only to the personal assets of one guarantor. Claims against the underlying companies, along with the securities and other recovery avenues available to creditors, continue separately. 
Source PTI