To facilitate such restrictions on entities found to have 'wilfully' defaulted on bank loans, the Reserve Bank is exploring ways to share details of these defaulters with Sebi on a real time basis, sources said.
Subsequently, these defaulters can be barred from raising funds through capital markets, as also through issuance of securities or other avenues under the jurisdiction of the Securities and Exchange Board of India.
The matter is yet to be discussed by Sebi internally and a final decision can be taken only after taking into account the provisions in various sets of existing regulations and the views of all stakeholders, a senior official said.
Currently, the information about wilful defaulters of bank loans are shared with Sebi and others, including credit information agencies like CIBIL, on a quarterly basis.
To prevent defaulters from accessing other funds, while not honouring the claims of their existing lenders, RBI also wants CIBIL and other credit information agencies to get the names and other details of such entities on a real-time basis, or as soon as an entity is declared as 'wilful defaulter' by any of the banks.
The proposal comes against the backdrop of spiralling bad loans in the banking system, especially fuelled by increasing number of wilful defaulters.
Apart from restricting defaulters from raising more money, real time sharing of information between the regulators would also help in safeguarding the interest of investors at large.
Sharing details on real time basis can better equip Sebi and other agencies to ensure that wilful defaulters identified by banks do not have an opening to raise further funds from gullible investors through the securities market.
Besides, real time sharing of details with entities such as Credit Information Bureau (India) Ltd (CIBIL) would enable a faster dissemination of information for prospective loan providers.
Going by estimates, the amount of non-performing assets (NPAs) in the system is worth about Rs 2 lakh crore.
Both RBI as well as the government have raised concerns about high levels of bad loans in the banking system especially at a time when the economic growth has been below five per cent in the last two financial years.
Generally, a 'wilful default' refers to failing to pay back the loan despite the entity having capacity to honour the said obligations.
Non-repayment of loans aggregating to Rs 25 lakh and above by such entities are considered as 'wilful defaults'.
Banks and financial institutions have been advised to examine all cases of wilful defaults of Rs 1 crore and above for filing of suits as well as consider criminal action wherever instances of cheating/fraud by the defaulting borrowers have been detected, according to RBI.
Concerned over bad loans, RBI Deputy Governor R Gandhi in May had urged banks should strengthen their internal credit appraisal systems to minimise the risk of default.
"...given the economic conditions prevalent in the country and elsewhere, the total stressed assets in the banking system (including restructured standard assets) as at December 2013 was 10.13 per cent of the gross advances of the banks, which is a cause of concern for the Reserve Bank," he had said.
The gross NPAs or bad loans of the domestic banking system were at 4.4 per cent of gross advances, he had said.
The gross NPAs of public sector banks rose to Rs 2.03 lakh crore at the end of September from Rs 1.55 lakh crore on 31 March, 2013.
Flagging concerns about NPAs, the Bank Employees Federation of India last week said that many corporates are defaulting on their loans.
"Our data also suggest that Rs 50,000 crore NPA is related to big borrowers who have borrowed over Rs 10 crore and above...," BEFI General Secretary Pradeep Biswas had said.