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The Reserve Bank on Thursday proposed tighter norms for treatment of wilful defaulters under which banks and other lenders will be required to examine all accounts with outstanding amount of Rs 25 lakh and more to see if the borrower is deliberately not repaying the loan.
RBI proposed that lenders should classify a borrower as a “wilful defaulter” within six months of their account being declared a non-performing asset (NPA).
The central bank has issued a 'Draft Master Direction on Treatment of Wilful Defaulters and Large Defaulters' on which comments have been invited till October 31.
According to Reserve Bank of India (RBI), the draft Master Direction expands the scope for regulated entities which can classify borrowers as wilful defaulters and broadens the definition of wilful default.
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