In a recent address to the Parliamentary consultative committee, finance minister P Chidambaram had asserted that public sector banks should be strict with wilful defaulters; the finance ministry has been exhorting banks to take a tough stance with errant borrowers. According to the RBI’s latest circular, once a company is declared a wilful defaulter, it loses access to finance from other banks and financial institutions. Further, promoters of such companies cannot be given fresh funds for five years to start a new venture. Lenders can also initiate criminal proceedings, if necessary, against the guarantors and companies or seek a change in management.
Recent Wilful Defaulters
Bombay Rayon: 4,500*
Deccan Chronicle Holdings: 4,000
* In the process of being named wilful defaulters
(In Rs crore)