poonam verma (Company Secretary) (191 Points)
28 May 2013Whether the Independant Directors and Non-executive promoter directors are liable to give personal guarantee/undertaking to the bank while the bank santions loan to the Company. the bank is asking for the same, while the independant directors are not interested, who is right?
Pls reply,
Thanks,
CS Poonam
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 28 May 2013
There is no law on the subject. It all depends upon the agreement with the Bank. You have to convince the Bank for waiver of their guarantee. However, it is for the Bank whether to accept your request or not, and it is for the company to decide whether to take the limits on the terms stipulated by the Bank or not.
CS SIDDHARTHA BANIK
(COMPANY SECRETARY)
(771 Points)
Replied 28 May 2013
Agree with Mr. Agarwal.
Also like to add the following:
you can provide the bank alternative guarantee or security, to the satisfaction of the bank. Much depend on your negotiation skill. Please keep it in mind that ultimately it is also the business of the bank to arrange clienf to sale their loan product.
Thanks,
CAclubindia
