Legal Question in Banking Law in India

directors resignation
We are 2 directors running a Pvt Ltd Company.We are enjoying credit facilities from bank and the project is still in the construction stage. Both the directors have given their personal guarantee to the bankers. Now I want to resign as the director and the company is ready to appoint another director who is ready to give his personal guarantee to the bank. Will the bank accept my resignation and release my personal guarantee if they find the new candidate for director as per their norms and fulfillment.

Asked on 12/31/08, 4:09 am

5 Answers from Attorneys

Aniruddha Pawse Aniruddha.P.Pawse Advocates

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Re: directors resignation

depends upon the Bank.

Answered on 1/02/09, 9:15 am

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Homi Maratha N.N. Maratha & Co.-Advocates

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Re: directors resignation

Yes.

You will have to follow the agreement conditions and abide to the conditions.

Answered on 12/31/08, 4:14 am

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J. Radhakrishnan independent Practice

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Re: directors resignation

If the Bank finds the proposed new director good enough from personal resource wise, it can agree to relieve you from the guarantee by substituting the new director's guarantee. It all depends upon the Bank's volition and you cannot get away from your guarantee obligations by just resigning your directorship.

Answered on 12/31/08, 5:02 am

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Vishwa Arya Arya & Co.

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Re: directors resignation

Yes, subject to the personal guarantee of the new director is enough to meet the credit facility from Bank. The retiring director must take a confirmation to this affect from the Bank to avoid any embarrasement later.

vishwa

Answered on 12/31/08, 5:11 am

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