Page 23 - Banking Finance October 2020

LEGAL UPDATE

Aggarwal, director, unsecured loans, ity and may extend credit to you ac- capacity of the primary borrower be-
Paisabazaar.com, an online market- cordingly. fore you agree to it. "As a risk mitiga-
place for financial products. "Guaranteeing a loan will reduce the tion measure, make sure that the loan

In case of non-payment, a guarantor overall loan eligibility of a loan guaran- applicants are financially disciplined
is liable to legal action. "If the lender tor by the outstanding loan amount of and stable enough to make regular
files a recovery case, it will file the case the guaranteed loan. So, one should repayments before agreeing to be-
against both the borrower and the always factor in his own credit require- come their loan guarantor," said
guarantor. A court can force a guaran- ments before agreeing to become a Mishra.
tor to liquidate assets to pay off the loan guarantor," added Aggarwal. Even after you have signed up, keep an
loan," added Mishra. Besides, the fact that you are a guar- eye on the loan. "Existing loan guaran-

Even if things don't go wrong, there antor to a loan will also figure in your tors can see their credit report at pe-
are other downsides to deal with as a credit report. This also means that any riodic intervals to monitor repayment
guarantor. default, either by the primary bor- activities, as credit reports list the de-
The moment you sign up as a guaran- rower or you, will affect your credit tails of the guaranteed loans as well,"
tor, your own loan eligibility will come score. said Mishra.
down. In case you apply for a loan, It may difficult to wriggle out from It is crucial to be careful in times such
lenders will consider the outstanding signing up as a guarantor in case a as these when many people are losing
amount on the loan for which you are close relative is involved. However, it their jobs or seeing their salaries
a guarantor as your contingent liabil- is important to assess the repayment reduce. T

International Monetary Fund emphasizes importance of

Atmanirbhar Bharat

Prime Minister Narendra Modi's call for an "Aatmanirbhar Bharat" (self-reliant India) is an important initiative, the
International Monetary Fund (IMF) said. "The economic package under this self-reliant India initiative, which was
announced in the aftermath of the coronavirus shock, has supported the Indian economy and mitigated significant
downside risks, so we do see that initiative as having been important," Gerry Rice, Director, Communications Depart-
ment, IMF, told reporters at his fortnightly news conference here.
"To achieve the stated 'Make for the World' goal in India, the priority is to remain focussed on policies that can help
further integrate India in the global value chain, including through trade, investment and technology," Rice said. Re-
sponding to another question, he said the IMF's joint study with the NITI Aayog and the Ministry of Finance shows
that to achieve a high performance in health-related sustainable development goals, India would need to gradually
increase its total spending in the healthcare sector from the current 3.7 per cent of the GDP.
"More generally, beyond the health sector, comprehensive structural reforms are needed to achieve more inclusive
and sustainable medium-term growth. "We have talked about those reforms before -- infrastructure, land reforms,
product market and labour market reforms, increasing female labour force participation, access to finance and better
jobs," Rice said.

Union Bank of India MD & CEO Rajkiran Rai new IBA chairman

Indian Banks' Association (IBA) said Union Bank of India's MD and CEO Rajkiran Rai G has been elected as the
association's chairman for the term 2020-21. "The managing committee of IBA at its meeting held on October 16,
2020 elected Rajkiran Rai G, Managing Director and CEO, Union Bank of India as the chairman, IBA for the term
2020-21," a release said. State Bank of India's Chairman Dinesh Kumar Khara has been elected as the deputy chair-
man of the association.

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