Banks may encounter legal hurdles in invoking personal guarantees

Experts say most promoters don't register assets under their names

Public sector banks moving the National Company Law Tribunal (NCLT) to invoke personal guarantees of promoters of defaulting companies face a tough and highly litigious path as none of the promoters register assets under their names, auditors and lawyers say. 

Some foreign banks hire detectives to gather information on promoters’ assets stashed overseas, but very few Indian banks resort to such measures.

After the Supreme Court paved the way for invoking personal guarantees of corporate debtors in May, several lenders have moved the NCLT to recover dues from defaulters.

For instance, Union Bank of India is moving the NCLT against Kapil Wadhawan, the