MUMBAI: 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 new norms will be effective after 90 days. The central bank has a new master direction to lenders to tackle wilful defaulters, mandating scrutiny of accounts with outstanding debts of Rs 25 lakh and above. Lenders have a six-month window to classify a borrower as a wilful defaulter.
No additional credit will be given to these defaulters for a year post removal from the list. It mandates lenders to check track record while classifying the borrower as a wilful defaulter and such identification should not be based on the basis of isolated transactions/incidents. “The default to be categorised as wilful must be intentional, deliberate, calculated and meeting.”
Issuing the direction on ‘the treatment of wilful defaulters and large defaulters’ on Tuesday, the RBI said banks and no-banks will have to examine ‘wilful default’ aspect in all NPA accounts with outstanding amounts of Rs 25 lakh and above.
“A lender will identify and classify a person as a ‘wilful defaulter’ by following a specified procedure. The evidence of wilful default will be examined by an identification committee”, as per the new master direction.
New norms will be effective after 90 days
New norms will be effective after 90 days. RBI has a new direction to lenders to tackle wilful defaulters, mandating scrutiny of accounts with outstanding debts of Rs 25 lakh and above