FinMin directs govt-owned banks to invoke personal guarantees of defaulters

SBI takes lead in preparing list of all defaulters, including large corporations, whose firms are under bankruptcy proceedings

Following a nudge from the finance ministry, Indian public sector lenders, led by the State Bank of India, are preparing the list of all defaulters who had given their personal guarantees while taking loans and defaulted leading to bankruptcy proceedings. As per the advice, the personal guarantees of all promoters, whose companies have gone to NCLT for debt resolution, must be invoked.

In a communication to the heads of all public sector banks on August 26, the Finance Ministry said the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019,