Promoters of loan defaulting companies to soon face crackdown by lenders

With apex court's backing, banks to speed up enforcing personal guarantees

Promoters of loan defaulting companies will soon face increased pressure to repay as banks get ready to invoke their personal guarantees. 

The Supreme Court asked the finance ministry on Tuesday to respond to a public interest petition seeking disciplinary action against public sector banks for not invoking personal guarantees of promoters and directors of firms defaulting to large loans. 

The ministry is expected to come out with a circular on the matter soon. "Banks will now be forced to invoke personal guarantees and will not treat promoters with kid gloves," said a banker.

Promoters of firms such as Jaypee, Alok