Guarantee related
Mahesh Chavda
(Querist) 06 August 2015
This query is : Resolved
Dear Experts,
Greetings for the day !!!
We have sactioned a case of CC where third party guarantee from individual was taken. Now we have received a letter (with Rs.100/- non judicial stamp paper) from the guarantor stating that he doesnot want to continue as guarantor w.e.f 01.08.2015 in the said facility however we have not received any written communication from borrower regarding this. Now my queries are ;
1) Can by simply informing to branch via written letter Guarantor is discharge from its liability ?
2) What are rules/laws relating to discharge of Guarantee ?
Please reply.
Thanks and regards,
Mahesh Chavda.
rajagopal.s
(Expert) 06 August 2015
Hi
The guarantor just cannot withdraw unless the borrower discharges his debt in full . the guarantor shall be liable to discharge the debt in full all of the outstandings of the borrower.
However the bank may choose not to disburse any further amount under the CC, till such time the borrower settles the debt or brings in another guarantor who can satisfy the bank to stand guarantee.
Kumar Doab
(Expert) 06 August 2015
The guarantor has given sufficient notice to Bank to act.
The Bank can act in any manner as it feels.
Bank should certainly respond to guarantor in writing by effective mode of communication preferably by Redg. Post.
Rajendra K Goyal
(Expert) 08 August 2015
Send registered notice / notice by hand by taking acknowledgement asking the Guarantor and the borrower to pay full outstanding. Inform till then the account could not be operated.
Close all transactions in the account after giving notice to the borrower.
Any credit in the loan account after date mentioned in the notice would be treated as repayment and would diminish the liability of guarantor to that extent.
Borrower may arrange for alternate guarantee to the satisfaction of the Bank.
