“In this connection, banks may consider putting in place a mechanism for monitoring the cases which may require initiation of individual insolvency process before the
against personal guarantors to corporate debtors. Banks may also consider setting up IT (information technology) system to collate data regarding personal guarantors to corporate debtors in all such cases for the requisite follow up and consequential action,” it said.
The finance ministry’s nudge came after the Supreme Court asked the finance ministry
to respond to a representation seeking disciplinary action against public sector banks (PSBs) for not invoking personal guarantees of promoters and directors of firms defaulting in repayment of huge loans.
Earlier, the State Bank of India had filed proceedings in the NCLT
Delhi against Anil Ambani to invoke his personal guarantees. Ambani’s personal guarantees were invoked after banks sent Reliance Communications to the NCLT for debt resolution
after a default on loans worth Rs 45,000 crore. On August 22, the NCLT allowed banks to invoke Ambani’s guarantees but the Delhi high court stayed the proceedings on August 27.
“Apart from all the companies which are already in the NCLT and their debt has been resolved, the list will also include the names of the companies which are currently pending in the NCLT,” said a source close to the development.
In 2017, the RBI had identified around 39 companies which were sent to the NCLT for debt resolution
in two batches. While invoking the personal guarantees, the banks attach the private properties of the defaulters. As of date, over 3,900 companies being admitted and a majority of these cases have been filed by the operational creditors followed by the financial creditors.
* Banks asked to prepare list of all defaulters
* Prepare IT system to collate data on all guarantors
* Invoke personal guarantees wherever possible
* List includes large borrowers, guarantors