Guarantee
s b krishna
(Querist) 30 May 2014
This query is : Resolved
Can a gunrantor cancel the guarantee given by him during the pendency of the loan availed by the borrower ? Please answer this question on the basis that the borrower has not committed any default as on date in his repayment schedule.
Guest
(Expert) 30 May 2014
First serve a notice by Regd post with ack due to the lender/financier marking copy to the borrower confirming that you are not willing to continue further as guarantor in this issue with some valid reasons thro an advocate and wait for feed back from them.
Anirudh
(Expert) 30 May 2014
Absolutely not. So long as the loan is outstanding, the guarantor will not be allowed to withdraw his guarantee. Yes, it will be possible to replace one guarantor by the other.
Sankaranarayanan
(Expert) 30 May 2014
I do agree with sri anirudh. Once committed then it should be replaced by another
R.K Nanda
(Expert) 30 May 2014
not possible till loan is fully paid.
Rajendra K Goyal
(Expert) 30 May 2014
You should send notice with copy to borrower showing clear intention that you do not want to continue as guarantor from a particular future date(giving sufficient time for completion of formalities by the Bank) and for any debit in the account after that date you would not be responsible. Also mention that Bank should not allow any overdrawing in the account above the sanctioned limit during this period.
You should also inform in writing to borrower to arrange for alternate guarantor to the satisfaction of the Bank.
You are liable for the outstanding of the account till same is not paid or guaranteed alternately and agreed by the Banker. You should claim applicability of Rule in Clayton case after date of your notice expires.
malipeddi jaggarao
(Expert) 30 May 2014
If the borrower's account is running satisfactorily and if he is in a position to offer another guarantee with higher net worth, the guarantor and borrower together can request the creditor (Bank) to release the original guarantor by substituting the new guarantor with his consent. However, this is purely at the discretion of the credit institution (Bank).
Still the guarantor wishes to withdraw, he should a serve a notice to the credit institution that he is withdrawing the guarantee. This does not mean he is free. It only limits his liability. His liability will be determined as on date of receiving notice by the credit institution
and thereafter for any further liability in the account, the guarantor is not liable and the bank can not recover other than the determined liability on the date of receipt of revocation of guarantee.
K.K.Ganguly
(Expert) 31 May 2014
1. No, the guarantor of a loan can not withdraw his gurantee unilaterally before the loan is fully repaid,
2. If the Borrower extends his loan amount further, the guarantor may refuse to stand as a gurantor for the said extended portion of the loan.
malipeddi jaggarao
(Expert) 01 June 2014
He can withdraw by serving notice but his liability will be crystalised on receipt of such notice by the creditor. He will not liable for further debits in the account.
T. Kalaiselvan, Advocate
(Expert) 01 June 2014
Though there are many opinions differing from one another, in my opinion I think expert Mr. R.k. Goyal's views are most agreeable. The author may follow the suggested advise or can confirm the same through his lawyer and proceed as per his advise.
