Withdraw the guarantee taken for someone's loan

This query is : Resolved

Sharad Tripathi (Querist)
Follow

25 January 2009 Hi,
I want to know that if somebody has taken a guarantee of someone's loan from a nationalised bank for a specific amount and now he want's to withdraw it,whether he can do so or not.
Please tell me the consequences in both the situation, if the borrower is agreed & ready to give another guarantee for the same worth, and if he is not agree and even not supporting the guarantor.
If the guarantor is discharged then whether the guarantee agreement & stamp paper signed is given by the bank in original to the guarantor or not if not then what document should he may ask for for the discharge of liability, from the bank.

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
Follow

26 January 2009 First he should approach the Bank and give them a letter the intention of withdrawing the guarantee and reason for the same.

If the Bank feels that what he is doing is correct.(eg he has given guarantee when he was a partner, now he wants to regsign.)Then they will send a letter to loanee to provide another equivalent gurantee.

Then after getting the new guarantee the Bank will give a letter stating that you have been discharged from the liability. They will not return the earlier signed documents.

If the person is not agreeing to provide new guanrantee, he cannot withdraw and in the case that because of guarantee he has paid money to Bank he can recover the other person under civil laws.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now