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RBI said banks will conduct periodic screening of 'wilful defaulters' in all NPA accounts with outstanding amounts of Rs 25 lakh and above.
RBI wilful defaulters: The Reserve Bank of India (RBI) on Tuesday issued a directive to deal with wilful defaulters and large defaulters. Under this, banks and non-banking financial companies (NBFCs) will have to check for 'wilful defaulters' in all non-performing assets (NPA) accounts with outstanding amount of Rs 25 lakh and above. Banks will identify and classify a person as a 'wilful defaulter' by following a specific procedure.
Who are those who deliberately do not repay their loans?
According to the directive, an identification committee will examine the evidence of willful defaulters. 'Willful defaulters' means a borrower or guarantor who has deliberately not repaid the loan and his outstanding amount is more than Rs 25 lakh.
Banks will have to investigate
RBI said, “Banks will conduct periodic screening of 'wilful defaulters' in all NPA accounts with outstanding amounts of Rs 25 lakh and above.”
If the internal preliminary investigation reveals any wilful default, the lenders will complete the process of classifying the borrower as a wilful defaulter within six months of the account being classified as an NPA.
The RBI directive further states that lenders should formulate a non-discriminatory board-approved policy in this regard.