'Co-op banks can't harass guarantors'

Updated on: 30 March,2009 08:58 AM IST |
Subroto Roy |

Says the commissioner of cooperative banks, following the controversy over Seva Vikas Cooperative Bank stalking a guarantor to recover the money borrowed by his friend

Says the commissioner of cooperative banks, following the controversy over Seva Vikas Cooperative Bank stalking a guarantor to recover the money borrowed by his friend

Following the controversy over Seva Vikas Cooperative Bank's Pimri-Bhosari branch stalking a guarantor to recover the money borrowed by his friend Think twice before you stand a guarantor, published in MiD DAY's issue dated March 23 Krishna Lavhekar, commissioner of cooperative banks, said thatu00a0 banks cannot harass guarantors without exhausting all means to recover the loan amount from the borrower.

Lavhekar also confirmed that recovery of loan money from the guarantor was au00a0 violation of procedure and he assured that if the bank has done it intentionally, proper action would be taken against it. "Banks need to be very cautious while dealing with guarantors," he said.

'No violation'

Meanwhile, Suresh Kale, manager of the bank, said that the bank had not violated any rules. Defending his action, Kale said, "Since it is the end of the financial year, we do not have enough manpower to send and pursue the case with the borrower. Hence, we have recovered the loan amount from the guarantor."