Why Financial Literacy must be taught in school from early days The ₹22,000 crore “99.97% haircut” headline on Subhash Chandra is misleading. Here are the facts. A lot of reporting has presented the NCLT decision as if banks lent ₹22,006 crore personally to Subhash Chandra and have now recovered just ₹6.25 crore. That is not what the case is about. Here is the actual picture: 1. ₹22,006 crore was NOT a personal loan to Subhash Chandra. The ₹22,006.57 crore figure represents admitted claims against Chandra in his capacity as a personal guarantorfor borrowings by several Essel/Zee-linked companies. He did not personally borrow ₹22,000 crore. 2. Only about ₹2,574 crore relates to guarantees given at the time of the original borrowing. Most of the other guarantees were furnished subsequently as additional security. Therefore, portraying the entire ₹22,006 crore as money originally lent on the strength of Chandra’s personal guarantee is factually wrong. 3. This is a personal-guarantor insolvency proceeding, not insolvency of the principal borrowers. The proceedings against Chandra arose after he had given a personal guarantee for a loan to Vivek Infracon from Indiabulls. The corporate entities that actually borrowed the money remain separately liable for their debts. 4. So what does the much-publicised 99.97% “haircut” actually mean? It is the reduction in the amount recoverable from Chandra personally as a guarantor, not a 99.97% final loss on ₹22,000 crore of bank loans. The repayment from Chandra’s personal estate is around ₹6.25 crore, with another ₹25 lakh towards the insolvency process. 5. The principal borrowers are still on the hook. The repayment plan envisages approximately ₹1,494 crore from the principal borrowers, in addition to ₹6.25 crore from Chandra personally. Creditors also retain recovery avenues against securities and other available assets of the corporate borrowers. Chandra has also stated that companies covered by the guarantees had borrowed nearly ₹45,000 crore as of January 2019 and that about ₹43,000 crore had subsequently been repaid. That is his statement and should be treated as such, rather than conflated with the NCLT’s personal-guarantor recovery. 6. The ₹6.25 crore figure was itself contested by creditors. Lenders questioned how Chandra’s presently disclosed net worth could be around ₹31.79 crore, when historical net-worth certificates cited figures of ₹45,888 crore in 2017 and ₹40,562 crore in 2018. They sought greater scrutiny of his assets. These are legitimate questions. Chandra’s office has disputed the historical figures, saying they reflected market capitalisation of Essel Group entities rather than his personal net worth. 7. The plan was not simply imposed by the NCLT. Creditors representing 80.81% of the voting share supported the repayment plan. Several major lenders, including LIC Housing Finance, HDFC Bank, Axis Bank, Canara Bank, RBL Bank and Union Bank, opposed it. The tribunal nevertheless held that the objections were insufficient to overturn the creditor-approved plan and that the tribunal should not substitute its own commercial assessment for that of the requisite creditor majority. In fact, some dissenting lenders are considering or pursuing challenges to the decision. And this is where the broader IBC picture matters. The Subhash Chandra matter is an exceptional personal-guarantor resolution. It should not be presented as representative of the Insolvency and Bankruptcy Code’s overall recovery record. As of March 2026: • Creditors had realised approximately ₹4.32 lakh crore through approved IBC resolution plans. Recoveries were 116.85% of liquidation value and 94.56% of fair value. • More than 32,000 cases were settled before formal admission, preserving credit worth nearly ₹14 lakh crore. This is one of the IBC’s most important behavioural effects: the threat of insolvency itself has encouraged distressed borrowers to settle before proceedings formally commence.
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