Legal Question in Banking Law in India

If a person takes a loan from a bank say about 10 Lakh by mortgage of his factory(which is the max he got by mortgaging his assest factory), can he stood as a guarantor for another person's loan in the same bank same branch worth for Rs. 1.5 lakh and a OD loan of 5 lakhs when still he is repaying his own loan by regular installments since 2yrs


Asked on 1/14/13, 7:04 pm

2 Answers from Attorneys
Fca Prashant Chavan Expert Edge LLP

15.01.2013

Dear Sir / Madam,

Though the bank has assessed that the maximum permissible loan by mortgage of your factory is Rs. 10 lakhs, you are entitled to get the valuation of your business done by a practicing Chartered Accountant to assess your true borrowing capacity. The independent assessment by the CA could enable you to stand as a guarantor for another person's loan to the extent of your assessed borrowing capacity minus the value of the net loan balance outstanding in your name till date.

Regards,

FCA Prashant Chavan

Mumbai

(You can mail me for further advice, guidance & support at [email protected])

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Answered on 1/14/13, 8:30 pm
Aniruddha Pawse Aniruddha.P.Pawse Advocates

i agree with Mr Chavan

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Answered on 1/15/13, 4:01 am


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