Overview - Suit Filed Accounts
The Reserve Bank of India ("RBI") constituted in May 2001 a Working Group on Wilful Defaulters for examining some of the recommendations of the 8th Report of the Parliament's Standing Committee on Finance on Financial Institutions, wherein the Committee had expressed concerns over the persistence of wilful default in the financial system.
The RBI has, from time to time, issued a number of circulars containing instructions on matters relating to wilful defaulters. All such instructions have been consolidated by the RBI in its Master Circular no. DBOD.No.CID.BC.1/20.16.003/2011-12 dated July 01, 2011.
The Master Circular, inter alia, intends to put in place a system to disseminate credit information pertaining to wilful defaulters (all non-performing borrowal accounts with outstanding aggregating to Rs.25 lakhs and above). This would help caution the banks and financial institutions to ensure that informed credit decisions are taken, no additional facilities are granted to the listed wilful defaulters, legal process, wherever warranted, and foreclosure of recovery of dues is initiated.