Willful Defaulters: The Reserve Bank of India, the regulator of the banking sector, has been on target since it issued a circular on June 8 regarding settlement with billful defaulters. On Tuesday, the RBI has presented a clarification on its behalf. RBI said that the matter of settlement agreement with willful defaulters is not new. This process is in existence for the last 15 years.
RBI has issued FAQs regarding the framework issued on settlement settlement with willful defaulters. In this release, RBI said that the provision of settlement of banks with those borrowers who are put in the category of fraud or willful defaulters is not a new regulatory rule. This regulatory directive has been going on for more than 15 years. RBI said that settlement with such borrowers provides an option to the lenders to recover their money without delay.
FAQs on Framework for Compromise Settlements and Technical Write-offshttps://t.co/93x1MIker2
— ReserveBankOfIndia (@RBI) June 20, 2023
Regarding the provision related to action against willful defaulters, the RBI said that the Master Direction issued on July 1, 2016 regarding frauds and the master circular issued on July 1, 2015 regarding willful defaulters have not changed anything. Has gone.
There is a provision in the legal action that a person listed as a willful defaulter by any banks or financial institutions will not be able to get institutional finance for a new venture for 5 years after his name is removed from the list of willful defaulters. That is, the people declared fraud will not be able to get finance from the bank for 5 years until they make the full payment of the fraud amount.
The FAQ also states that borrowers declared as fraud or willful defaulters will not be able to borrow fresh funds from lenders for a cooling period of 12 months.
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