Wilful defaulters may be the flavour of the season but they’ve been around for more than three decades, reports Shakti Patra in Mumbai. Bank of Baroda, for instance, has an account that was recognised as a non-performing asset (NPA) way back in December 1983, but the borrower was declared a wilful defaulter only in March 2010. But, for the most part, lenders have been quick to call a spade a spade:
Typically, a wilful defaulter is labelled as one within six months of the exposure turning toxic.
Not all banks are equally candid about these accounts: Dena Bank, United Bank of India and Punjab & Sind Bank, for instance, have just disclosed the names of the defaulters but not the dues.
Some like Bank of Maharashtra have only disclosed the names and amounts outstanding of those defaulters against whom they have filed legal suits, while others like Oriental Bank of Commerce have done the same for all defaulters whether or not they have filed legal suits against them.
According to the Reserve Bank of India, a wilful default takes place when a borrower defaults in meeting its payment/repayment obligations to a lender despite having the capacity to do so; or when a borrower defaults in meeting its obligations because of diversion/siphoning off of funds; or when a borrower has defaulted in meeting its obligations and has also disposed of or removed movable fixed assets or immovable property given by him/it for the purpose of securing a term loan without the knowledge of the lender.
