Lok Sabha Question No. 87 (STARRED), answered on 2025-02-10
Subject: List of Wilful Defaulters
Ministry: FINANCE
Asked by: Prof. Sougata Ray

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA STARRED QUESTION NO. *87

ANSWERED ON MONDAY, 10 TH  FEBRUARY, 2025 / MAGHA 21, 1946 (SAKA)

## LIST OF WILFUL DEFAULTERS

## *87. PROF. SOUGATA RAY:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Reserve Bank of India prepared the list of wilful defaulters, failing to repay bank loans despite having the means to do so;
- (b) if so, the details thereof;
- (c) whether a wilful default happens when the borrower has not utilized the finance from the lender for the specific purpose for which finance was availed or has the funds diverted for other purposes or siphoned off the funds or disposed of or removed the movable fixed assets or immovable property without the knowledge of the bank;
- (d) if so, the details thereof; and
- (e) the steps taken by the Government to ensure the recovery of loans from such defaulters?

## ANSWER

## FINANCE MINISTER (SMT. NIRMALA SITHARAMAN)

(a) to (e): A statement is laid on the Table of the House.

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Statement  referred  to  in  reply  to  parts  (a)  to  (e)  in  respect  of  Lok  Sabha  Starred Question No. *87 for reply on 10.02.2025 regarding List of Wilful Defaulters asked by Prof. Sougata Ray.

(a) to (e): RBI, vide Master Direction on Treatment of Wilful Defaulters and Large Defaulters, has advised lenders to submit the list of wilful defaulters to all Credit Information Companies (CICs)  on  a  monthly  basis,  and  CICs  are  required  to  display  the  same  on  their  respective websites. The details of the same are available on and can be accessed at the following URL of CICs, registered with and regulated by RBI:

- (i) suit.cibil.com,
- (ii) suit.experian.in,
- (iii) equifax.co.in, and
- (iv) Crifhighmark.com

It is stated in the aforesaid Master Direction that a wilful default by a borrower occurs when the borrower defaults in meeting payment/repayment obligations to the lender and any one or more of the following features are noticed:

- (a) the borrower has the capacity to honour the said obligations;
- (b) the borrower has diverted the funds availed under the credit facility from lender;
- (c) the borrower has siphoned off the funds availed under the credit facility from lender;
- (d) the borrower has disposed of immovable or movable assets provided for the purpose of securing the credit facility without the approval of the lender; and
- (e) the borrower or the promoter has failed in its commitment to the lender to infuse equity despite having the ability to infuse the equity, although the lender has provided loans or certain concessions to the borrower based on this commitment and other covenants and conditions.

Banks  initiate  recovery  actions  in NPA  accounts,  including  those  pertaining  to  willful defaulters,  under  the  various  recovery  mechanisms  available,  such  as,  filing  of  suits  in  civil courts or in Debt Recovery Tribunals, action under the Securitisation and Reconstruction of Financial Assets and Enforcement of security Interest (SARFAESI) Act, filing of cases in the National  Company  Law  Tribunal  under  the  Insolvency  and  Bankruptcy  Code,  through negotiated settlements/ compromise, and through sale of non-performing assets.

Further, comprehensive measures have been taken to deter wilful default and to recover NPAs, including those pertaining to wilful defaulters. Such measures include, inter alia , the following:

- (i) Change  in  credit  culture  has  been  effected,  with  IBC  fundamentally  changing  the creditor-borrower  relationship,  taking  away  control  of  the  defaulting  company  from promoters, and debarring wilful defaulters from the resolution process.
- (ii) The  SARFAESI  Act  and  The  Recovery  of  Debt  and  Bankruptcy  Act  have  been amended to make it more effective.
- (iii) Wilful  defaulters  are  not  sanctioned  any  additional  facilities  by  banks  or  financial institutions, and their unit is debarred from floating new ventures for five years. Further,
- wilful defaulters and companies with wilful defaulters as promoters/directors have been debarred from accessing capital markets to raise funds.
- (iv) As per RBI's Master Direction on Treatment of Wilful Defaulters and Large Defaulters, banks may initiate criminal proceedings against wilful defaulters in eligible cases.
- (v) For effective action against fugitive offenders,  including wilful defaulters, the Fugitive Economic Offenders Act, 2018 has been enacted which provides for attachment and confiscation of property of fugitive offenders and has disentitled them from defending any civil claim.

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