Sujit Varma News Today

Indian lenders will now insist that a negative lien is created on the assets underlying personal guarantees given by promoters of companies raising bank loans, said people at advisory firms. The move is aimed at preventing them from transferring these personal assets to a special trust, which may be bankruptcy remote.

In response to the recent Supreme Court order upholding recovery provisions against personal guarantors, Indian lenders are now taking measures to protect their interests. They will require a negative lien on the assets underlying personal guarantees given by promoters of companies raising bank loans. This will prevent promoters from transferring these assets to a special trust that is bankruptcy remote.