New Delhi (IANS) | The Reserve Bank of India (RBI) on Tuesday said that the settlement with the borrowers is aimed at providing multiple avenues to the lenders to recover the money without any delay. The RBI made the remarks while releasing a set of frequently asked questions (FAQs) on the framework for settlement settlement and technical write-off.
RBI said, the primary regulatory objective is to enable multiple avenues for lenders to recover money without any delay.
It further added that the provision enabling banks to enter into a compounding solution in respect of borrowers classified as fraud or willful defaulter is not a new regulatory directive and has been the prescribed regulatory stance for more than 15 years.
On 8th June RBI has issued a circular on Framework for Compromised Settlement and Technical Write-off.
On dilution of punitive measures, the central bank said that as mentioned in the Master Direction on Frauds dated July 1, 2016 and the Master Circular on Willful Defaulters dated July 1, 2015, will remain unchanged.
These punitive measures include that no additional facilities should be extended by any bank to borrowers listed as willful defaulters and such companies will be barred from starting new ventures for a period of five years from the date of striking off their names. Institutional finance may be denied for the same.
RBI said borrowers classified as fraud are barred from seeking bank finance for a period of five years from the date of full payment of the fraud amount.
–IANS
