SBI's plan to invoke guarantees on companies under NCLT unlikely to succeed

Lawyers say SBI's credit recovery team will have to wait for a while

A proposed plan of the State Bank of India (SBI) to invoke personal and corporate guarantees of defaulting companies is unlikely to pass legal scrutiny, having been barred from doing so in previous cases. The country’s largest bank is likely to issue about 200 notices invoking personal guarantees, even in cases where insolvency proceedings were underway.

Apart from numerous smaller companies, at least 40 large accounts are facing insolvency. The Reserve Bank of India (RBI) had in June last year come up with 12 names for immediate bankruptcy referrals. Later, it brought another list of 26 large accounts.

Such promoters