RBI Bank Default: Some instructions were issued to give the option of settlement with the bank in cases of willful bank defaulters and bank loan frauds, on which some more things have now been clarified by RBI. Let us know about it in detail.
The Central Reserve Bank had last week issued some instructions to give the option of9.000. settlement with the bank in cases of willful defaulters and bank loan frauds, which had seen protests from bank employee organizations. After this, now some more things have been clarified by RBI on this. The central bank says that these instructions have helped in strengthening the existing system of banking.
What did RBI say?
The Reserve Bank of India (RBI) has said that the recent instructions related to settlement of willful defaulting borrowers and technical write-off will bring in certain related provisions to harmonize the existing regulatory regime for banks and for better transparency. Has helped in hardening.
What were the instructions of RBI regarding the agreement?
On June 8, the Reserve Bank had issued a comprehensive regulatory framework for all the entities coming under the purview of regulation in the results of the bi-monthly monetary policy. Under this, the cases that are to be written off technically are to be monitored. However, banks’ labor organizations AIBOC and AIBEA have opposed this move of the Reserve Bank, saying that settlement through compromise with those who willfully default in loan payments will present a wrong picture.
After this, the Central Bank released questions and answers (FAQs- frequently asked questions) related to this on Monday. In the FAQ, the Reserve Bank has given a negative answer to the question of bringing in a new provision for the banks to provide a compromise solution in cases of fraudulent accounts and willful defaults.
It said that settlement in cases of fraud and willful default is not a new regulatory directive and has been in existence for the last 15 years. Along with this, it has been said in the FAQ that the circular issued on June 8 in such cases is not weakening the punitive measures in any way.
