Suggestive measures for Defaulters of RBI
Measures to be taken by the Defaulters of RBI
A. A willful defaulter must be identified and notified when the account is in operation, preferably before the account becomes NPA.
B. Specific incidences must be evidenced to the borrower in declaring him as a willful defaulter covered under the definition of willful default.
C. The committee to decide on the declaration of willful defaulter must also include a senior officer of the RBI and an officer of the Department of Industries of either the Central Government or the State Government.
D. If a suit/ a counter claim has been filed either by the lender or the borrower and the matter is sub judice, declaration of willful defaulter, which is a coercive measure, must be restrained until final decision of the honorable court.
E. The final decision of the committee must be communicated to the borrower before either, declaring him as a willful defaulter or exempting him from the list as a measure of natural justice.
With number of banks and FI’s increasing rapidly both in the public and the private sectors, and with the quality of manpower engaged, extreme caution is essential that no innocent borrower becomes a victim of this mechanism for issues other than listed above, specially due to interpersonal disputes of the borrower and the lender or with issues involving vested interest.
Notwithstanding anything contained herein, this facility provided to the banks and FI’s must never be utilised as tact to exert pressure on innocent borrowers for recovery of their dues, especially when the matter is sub judice.
A misdeclaration in this regard may result not only in the death of entrepreneurs but enterprises which form an integral part of the society today. An honest and disciplined entrepreneur as much as a responsible Bank officer is the call of the nation today.
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