Wilful defaulters: RBI clears air over settlement norms
New Delhi, June 20
The RBI on Tuesday sought to clear the air about a settlement provision issued on June 8 that had given rise to misgivings among bank unions and opposition parties.
“The primary regulatory objective is to enable multiple avenues for lenders to recover the money in default without much delay”. Rather the measures rationalised the existing regulatory guidance to banks and tightened some of the related provisions to ensure greater transparency, said the RBI in “Frequently Asked Questions” (FAQs) on Framework for Compromise Settlements and Technical Write-offs.
It said the provision enabling banks to enter into compromise settlement with borrowers who were wilful defaulters is not a new regulatory instruction but has been the settled regulatory stance for more than 15 years.
