Legal Question in Banking Law in India

dear sir, i have signed as a co-obligant for my fd's personal loan, after that he lost a job and become default. please tell me how far i am responsible for doing the payment and will bank take all reserve from the borrower first or they directly put legal case on me.


Asked on 1/28/13, 4:47 am

2 Answers from Attorneys
Fca Prashant Chavan Expert Edge LLP

28.01.2013

Dear Sir / Madam,

(Mookandapalli, Hosur, Tamil Nadu)

If you are only a guarantor, the bank will have recourse to all the repayment means of the original borrower first, whose primary responsibility it is, of settling the outstanding loan. Only when the original borrower is declared an "insolvent" can the bank proceed for recovery of the balance from the guarantor.

If you are a co-borrower, the bank has equal recourse to recover the loan from your pledged securities along with the pledged securities of the original borrower in the event of default.

Regards,

FCA Prashant Chavan

(You can also mail me for any further on-line advice at [email protected])

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Answered on 1/28/13, 5:46 am
Jayesh Desai Jayesh Desai

You are equally liable.

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Answered on 1/31/13, 3:13 am


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