Section 12: Recovery of outstanding loan, etc.

(1) Where there has been a default in the repayment of the interest or principal of any loan guaranteed under this Act, the bank concerned shall in the first instance endeavour to recover the amount outstanding from the borrower or his sureties, if any, and may for that purpose dispose of any security obtained in respect of the loan.
(2) Where any part of the interest or principal remains outstanding after the steps specified in subsection (1) of this section have been taken, or where the recovery of any amount outstanding is impracticable, the bank may apply, in the prescribed form, to the Board for payment and the Board shall, in accordance with the terms of the guarantee, settle the claim.