Mallya effect! Government asks all state banks to invoke personal guarantees in case

[V.Balasubramani]

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Mallya effect!

Government asks all state banks to invoke personal guarantees in cases of default

NEW DELHI: The government has raised the pressure on defaulters asking all state-run banks to invoke personal guarantees submitted in case a borrower company defaults.

"We have issued the circular after consultation with Reserve Bank of India as it was observed that banks were invoking personal guarantees as the last step towards recovery process. We do not want them to wait for eternity as it has been in the case of Kingfisher AirlinesBSE 3.03 %," said a senior finance ministry offic ..

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[yesmohan]

Now, there is a gossip in the bank circles that investigations revealed that Mallyya has already transferred around 6500 crores of the proceeds of the loan to foreign countries.
It appears that deliberate, preplanned and sustained effort has been made by Mallayya,to cheat the banks.