The Reserve Bank of Indian (RBI) has recently released Master Directions concerning the treatment of wilful and large defaulters. These guidelines aim to establish a fair and transparent process for classifying borrowers as wilful defaulters, in line with principles of natural justice. They outline the procedures for identifying and classifying wilful defaulters, reviewing accounts to detect such defaults, and implementing penalties and other actions against them.
"The primary objective of these Directions is to provide for a non-discriminatory and transparent procedure, having regard to the principles of natural justice, for classifying a borrower as a wilful defaulter by the lenders. The directions also aim to put in place a system to disseminate credit information about wilful defaulters for cautioning lenders to ensure that further institutional finance is not made available to them."said the RBI.
Master Directions: