Page 105 - A Banker Down the Rabbit Hole

The borrower was already penniless. But the guarantor who was a friend
of his, had about 8 acres of agriculture land. He got so much depressed
that he became a "monk" and started spending time with temple priests
and behaved as if he had lost his mind. May be he felt he was ruined
due to that guarantee and all his land would be sold by the bank to
recover loan along with huge interest for several years. The bank
proceeded for execution of decree obtained from the court against the
guarantor.

Insights from the episode

1. Those who want to keep their reputation, they only will pay sooner
or later. Those gone broke have no motivation to repay.
2. Many guarantors face the music when borrower is not able to repay
the loan. Guarantor must understand the implications of signing any
bank document through a third person other than the borrower. This
third party should be capable to understand the terms and conditions
of the guarantee agreement himself and to make the guarantor also
understand before taking this financial liability decision.

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102 | A Banker down the Rabbit Hole