The bankruptcy code for individual debtors, expected to be notified soon, would hopefully synchronize well with IBC and provide for a way to deal with personal guarantees in a time-bound manner. Photo: iStock
Banks in India have traditionally placed tremendous faith on promoters and personal guarantees provided by them, on par with if not higher than the intrinsic creditworthiness of the proposal itself (i.e. borrower, project/business, industry, etc.).
The relationship between promoters and banks in India has been considered a long-term marriage as hitherto banks never had access to a credible and effective legal framework to take control away from the errant promoters. The banks, therefore, did the next best thing, i.e. to seek more acc…
Read the full article at: http://www.livemint.com/Opinion/qzt9gFib7Otk47pEyRKnrJ/Dealing-with-promoters-guarantees.html
