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RBI says banks must submit defaulter list

The Reserve Bank of India has asked banks and financial institutions to submit lists of accounts of "wilful defaulters" to the central bank and the Credit Information Bureau (India) Ltd.

In a notification, the RBI said that a wilful default would have occurred if a unit doesn't make payments when it has the capacity to do so.

A wilful default would also have occurred if a unit doesn't have the capacity to make payments but has used the funds for purposes other than what they were lent for or outright has no assets to show for the funds.

Banks and institutions must provide lists every quarter to both the RBI and CIBIL of wilful defaulters against whom they have filed suits for recovering loans of Rs 2.5 million or more.

From March 2003 onwards, they have to provide this information only to CIBIL.

The RBI has also asked banks and institutions to periodically provide it with lists of wilful defaulters against which suits have not been filed.

CIBIL was set up in January to facilitate the exchange of information between banks and institutions for curbing the growth of bad loans in the system.

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