Rahul D (Executive ) 21 October 2012

Can bank report a non-director as willful defaulter to cibil

Hi All,

A bank has already issued SARFAESI 13(2) notice to the company and its directors and guarantors. It has now given letter stating it will send the name of the company, its directors, and the guarantors for willful defaulters list in RBI/CIBIL.

Now as per the RBI master circular on Willful defaulters, though the bank can seek to send the name of the company & its directors, but nowhere it is mentioned that it can do so for guarantors (who are not directors). So can the bank send the name of such guarantors (non-director) too?

Thanks.

Reply Follow

5 Replies

RAJU O.F., (Advocate) 21 October 2012

Guarantors also treated as borrower. Hence, if the loan is defaulted willfully, bank may give their names to CIBIL. If such guarantor did not mortgage/hypothecate any security to the bank, no action under SARFAESI Act, but in that case also his personal properties can be attached and sold through DRT/Court.

(Guest)

Borrower or guarantor, both are treated as defaulters if no payment of loan installments are coming. If the borrower becomes a defaulter the responsibility to get the debt realised or making payment by self rests with the guarantor. If he fails in his responsibility he is also treated as defaulter.

Rahul D (Executive ) 28 October 2012

Dear Mr. Raju & Mr. Dhingra,

Thanks for your clarifications. I understand that the guarantor is treated similar to borrower and is liable to pay up. But if the guarantor is not a director of the company & he does not take part in the operation of the company then how can he be mentioned as a "Wilfull" one? He is only liabel to pay but he has not committed the default.

Look forward to your responses. Thanks.

Surendra Gupta (Banker) 04 November 2012

The liability of the Borrower & Guarantors is joint and several.

The bank serves the notice recalling the loan and asking all the co-obligants (Borrower & Guarantors) to adjust the account. In case of default, the bank is fully justified in proceeding against all the co-obligants (Borrower & Guarantors)