19 May 2009
We have a consortium banking and recently we introduced SBI as a member in consortium. We are availing only fund based and non fund based facilities and at present there is no term loan. While entering into interse agreement the advocate of SBI raised one issue that the list of all the assets be declared. The logic behind this is that in case company's account gets NPA and if any asset is not in the list then the directors can say that since the asset is not in the list, it is a personal asset and can not be auctioned. But the advocate of lead banker says there is no such requirement of asset list and only clause to be provided in the interse is "Present and future assets of the company"
So what is the correct legal status. for want of clarification our agreement is held up
19 May 2009
There is nothing wrong in furnishing the list of assets as desired by SBI,it is a standard banking reqiurement and there is no need to be circumspect about it. Further the concept of consortium in banking has been given a burial sometine ago at present it is multiple banking that is in vogue where each bank has to know which are the assets secured to it as per the bank's sanction letter
19 May 2009
Seems the clause in the interse agreement may be redrafted as 'present assets of the company as per list-a attached as well as the future assets of the company'
CAclubindia
