RBI issues master guidelines for wilful loan defaulters

To tackle the menace of wilful defaulters, the Reserve Bank has asked banks and other lenders to scrutinise non-performing accounts with outstanding of Rs 25 lakh and above and has barred them from extending new loans to those borrowers who have been classified as wilful defaulters for a year after being removed from the list.

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.

The new norms will be effective after 90 days