ICICI Bank, HDFC Bank and Axis Bank are among lenders that have scrapped personal guarantee clause to bail out four microfinance companies, but they could be on the hook in the Rs 7,000-crore debt restructuring if business prospects do not improve dramatically. The lenders have agreed to waive the personal guarantee since the deadline to finalise a rescue package was fast approaching, people familiar with the development said. The deadline to complete the corporate debt restructuring expires on September 30. "We have decided to end the stalemate and waive the personal guarantee clause for Spandana Spoorthy Financial, Asmitha Microfin, Share Microfin and Trident Microfin," a senior banker involved with the negotiations said. The terms of the CDR proposal for each institution will be finalised by next week. Banks have also convinced MFI promoters to infuse capital during the period of loan recast. "Future Financial had agreed to grant personal guarantee, so that stays," he said.
Source : Economic Times
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