By Renuka Sane
In this season of non-performing assets (NPAs) clean-up, lenders recently moved to invoke the personal guarantees the Ruias had made on the debt taken by Essar Groups power companies. Zee Groups promoter gave a personal guarantee for payment obligations on an irrevocable and unconditional basis to a group of lenders. In other news, farmer distress has led to several announcements of farm loan waivers. These disparate events, at two ends of the income distribution, emphasise the need for a personal insolvency law.
It is common in India to have promoters give personal guarantees to large lenders on their loans. Personal guarantee is a promise to pay the other parties debt here, the limited liability firm in the event the p…
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