RBI Rules: According to a recent update, let us tell you that last week, RBI has prepared a draft to curb those who deliberately do not repay the loan or those who fail to repay the loan despite the ability to pay. Let us know the complete information related to this update in the news below.
The Reserve Bank of India (RBI) last week prepared a draft to curb those who willfully default on loans or those who fail to repay loans despite their ability to repay. These proposed rules may increase the problems of willful defaulters. In fact, willful defaulters means those borrowers who have the ability to repay the loan but still do not do so.
RBI has started preparations to take strict action against such people. In the new draft of the Central Bank, it has been said that willful defaulters taking loans of more than Rs 25 lakh will be cracked down on in many ways. The special thing is that these proposed rules are based on the feedback of loan giving companies and suggestions of various courts.
Why is RBI taking this step?
This change against willful defaulters has become very necessary as the cases of willful non-repayment of loans have increased in recent years. A report said that by the end of December 2022, the intentional default loan amount had reached about Rs 3.4 lakh crore.
Such defaulters are nothing but criminals to the financial system, because they borrow and run away. Since the bank is the custodian of public money and when the money lent as loan is not returned, the depositors have to suffer the consequences.
Such borrowers are a threat to the banking system.
Distressed borrowers or businesses that intentionally default on loans are not bankrupt. Default has become a way for them to avoid not repaying the loan. Such people have been endangering the banking system for a long time by using legal loopholes as well as the power of money.
In the proposal given by RBI regarding such willful defaulters, these people will have to first settle their old NPA account to take a new loan. Along with this, RBI has proposed that within 6 months of an account becoming NPA, it should be tagged as willful defaulter.
These problems will arise if declared a willful defaulter-
Once a person taking a bank loan is tagged as a willful defaulter, he will have to face many problems. First of all, such people will not get any additional loan from the bank or financial institution. At the same time, under this proposal, willful defaulters will not get the facility of restructuring of loan. It has been said in the draft of RBI that NBFCs should also be allowed to tag accounts as willful defaulters keeping these rules in mind.
RBI said in its circular that the purpose of these instructions is to create a system regarding those who deliberately do not repay the loan, so that the loan giving banks or financial institutions can decide not to give loans to such people in future.