FREEDOM & LIBERTY (Business) 03 April 2014

Guarantor

Hi All

'A' and 'B' are brothers, A being the elder one. A has secured few of B's properties as Guarantor for A's business interest in his CC banking account.

Now A's business is in trouble and the CC account is about to be declared NPA status. B has no relation to the business of A whatsoever apart from the Guarantor status.

Query :

1. Will B's CIBIL status be affected for being a Guarantor to A, who's CIBIL status is downgraded?

2. Will it be possible for B to revoke the Guarantor status at this point of time?

3. What is the legal recourse for B to protect his interests?

Thanks & Regards

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1 Replies

unnikrishnan (branch manager) 14 April 2014

Sir,

as far as i know the CIBIL Report contains the loan taken by the person in the capacity of Borrower or Guaranter appears in the CIBIL Report so usually banks ignore the loan taken in the capacity of guaranter

But if the outstanding amount is high as per CIBIL report for the loan taken in the capacity of Guaranter and it appears in the Present outstanding balance of the CIBIL the Other Banks may decline the loan to the Guaranter

The solution is repay the loan as the Guaranter status cannot be revoked without bank give consent to it

or if Mr A;s property is sufficient to the loan then you can request the bank to take possession first for the property belong to Mr A if SARFAESI is initiating