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Master Circular on Wilful Defaulters

RBI/2013-14/63
DBOD No. CID.BC. 3 /20.16.003/2013-14

July 1, 2013

i) All scheduled commercial banks (excluding RRBs and LABs) and
ii) All India Notified Financial Institutions

Dear Sir,

Master Circular on Wilful Defaulters

As you are aware, the Reserve Bank of India has, from time to time, issued a number of circulars to banks and financial institutions (FIs) containing instructions on matters relating to wilful defaulters. In order to enable the banks/FIs to have all the existing instructions on the subject at one place, this Master Circular has been prepared. The Master Circular incorporates all the instructions/guidelines issued on cases of wilful default, which are operational as on date. The Master Circular has also been placed on the RBI web-site (http://www.rbi.org.in).

Yours faithfully,

(Rajesh Verma)
Chief General Manager

Master Circular on ˜Wilful Defaulters™

Purpose:

To put in place a system to disseminate credit information pertaining to willful defaulters for cautioning banks and financial institutions so as to ensure that further bank finance is not made available to them.

Application:

To all scheduled commercial banks (excluding RRBs and LABs) and All India Notified Financial Institutions.

Structure:

1

Introduction

2

Guidelines issued on wilful defaulters on May 30, 2002

2.1

Definition of Wilful Default

2.2

Diversion and siphoning of funds

2.3

Cut-off limits

2.4

End-use of Funds

2.5

Penal measures

2.6

Guarantees furnished by group companies

2.7

Role of Auditors

2.8

Role of Internal Audit / Inspection

2.9

Reporting to RBI / Credit Information Companies

3

Grievances Redressal Mechanism

4

Criminal Action against Wilful Defaulters

4.1

J P C recommendations

4.2

Monitoring of End Use

4.3

Criminal Action by Banks / FIs

5

Reporting names of Directors

5.1

Need for Ensuring Accuracy

5.2

Position regarding Independent & Nominee Directors

5.3

Government Undertakings

5.4

Inclusion of Director Identification Number (DIN)

6

Annex 1 – Reporting Format

Annex 2 – List of Circulars consolidated

Click here to download the Master Circular

Tags: financeFinancial institutionForeign Exchange Management ActIndiaMaster CircularRajesh VermaReserve Bank of India

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