Legal Question in Banking Law in India

Re: Guaranter

Once you have guaranteed, you cannot escape liability. Your liability is co-extensive with that of the principal debtor. Now that the borrower is dead, the Bank is sure to proceed against you. If you are unable to pay the same due to your financial condition, better go in for insolvency and save yourself from arrest. Of course, unless you get discharge in insolvency proceedings, you cannot borrow or stand for election or even seek employment in a Bank. If you are already in employment in a bank, on applying for insolvency, you will lose the job. Banks mean business. You have to blame yourself for the mess.

Re: Guaranter

As indicated by my fellow colleagues your liability will be co-extensive with your friend. Though, there are certain provision under law which may be available to you so that you may get out of this mess. However, I suggest you should contact a local lawyer who would understand you case and do the needful.

I believe if those priviledges are available to you, you may have to file a case in the court and you would be free from the obligation.

Re: Guaranter

(a) You have not disclosed the purpose of loan granted by the Bank in favour of the deceased ?

(b) You have also not disclosed how the loan amount was utilized by the deceased.

The loan may be recovered from the ESTATE of the deceased. You may talk to the bank and impress upon them that they should first effect recovery from the estate of the deceased and then come after you as a guarantor.