Team Blitz India
NEW DELHI: Lenders may get more flexibility in dealing with potential wilful defaulters as the Reserve Bank of India (RBI) may make in-person hearings with borrowers mandatory at the time of identifying a loan account as stressed, two persons aware of the development said. Earlier, in-person hearings were optional, and were conducted at the last stage just before classifying a borrower as wilful defaulter.
The RBI is considering the change on the suggestions of banks, which believe that chances of making recoveries are higher if a dialogue is started at an early stage, the people cited above said on the condition of anonymity. The wilful defaulter tag shuts out borrowers from the formal banking sector.
Finance ministry officials who met some of India’s top bankers recently also favour such flexibility, rather than sending all such accounts into a protracted legal process, the people cited above said.
The changes may figure in RBI’s final guidelines on Wilful Defaulters Framework for Compromise Settlement and Technical Write-offs expected in January.
