Why do not banks invoke private ensures of company mortgage defaulters, SC asks


Tribune News Service
New Delhi, July 21 

As hundreds of crores of rupees of financial institution loans stay unpaid, the Supreme Court has requested the Ministry of Finance to answer a person who raised questions over public sector banks not invoking private ensures of massive company debtors.

Petitioner Saurabh Jain contended that about Rs 1,900 crore was misplaced each day as Public Sector Banks weren’t invoking private financial institution ensures furnished by huge corporates.

On behalf of Jain, senior counsel Manan Kumar Mishra identified that the Ministry of Finance itself has by a round directed private ensures issued by promoters/managerial personnel to be invoked.

But “despite this Circular, Public Sector Undertakings continue not to invoke such guarantees resulting in huge loss not only to the public exchequer but also to the common man,” he submitted.

While permitting Jain to withdraw his petition, a Bench headed by Justice Rohinton Nariman on Monday requested him to first method the Ministry of finance with a illustration inside two weeks.

The prime courtroom directed the Finance Ministry to answer Jain’s illustration in 4 weeks from the date of receipt.

 



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