Bank gurranty
gourav arora
(Querist) 18 May 2015
This query is : Resolved
Dear Sir,
My Clint's Brother has a CC Limit in Bank. My Clint is Guarantor in his limit and pledged his property in bank.
My query is :
My Clint can return his guaranty. He want to do so.
What is the process.
?????
Kindly reply in brief.
And
IF his brother will not pay the cc limit. How can bank recover his amount.
Gourav Arora
Narendra Sharma
(Expert) 19 May 2015
Ordinarily, your Client can not revoke his guarantee.However, his guarantee may be replaced with other person's guarantee, subject to prior approval of the Bank.
IF his brother will not pay the cc limit, the bank can recover the amount by proceeding against the property of guarantor under section 13(4)of the SARFAESI Act.
Rajendra K Goyal
(Expert) 19 May 2015
Your client should serve registered notice regarding withdrawal of the guarantee to Bank and the borrower and not to allow any further debit, overdraft after a particular period if acceptable alternate guarantor not provided.
However, your client can not escape the outstanding liability as on effective date.
malipeddi jaggarao
(Expert) 19 May 2015
If the guarantor wants to revoke the guarantee, he should serve the notice on the lending bank and the borrower about his intention to withdraw the guarantee. Then the borrower has to find a substitute with sufficient net worth to the satisfaction of the Bank. If Bank satisfies, it will release the original guarantor, review the credit facility with the new guarantor. If the Bank does not wish to accept the new guarantor, the original guarantor's liability can not be extinguished simply he has served the notice. However, his liability is limited to the outstanding dues in the account as on date of recept of notice by the Bank. For realizing these dues, the Bank can take legal action or go for SARFAESI Act by bringing the property already mortgaged for auction. Hence, it is always better to reques t the borrower to make a suitable arrangement and get the consent of the Bank for the new guarantor, get the account reviews and get the old guarantor totally released.
T. Kalaiselvan, Advocate
(Expert) 21 May 2015
Well advised by experts. Your client cannot wash away his liability or responsibility as a guarantor until other legal solutions are arrived at as suggested by experts.
