Mumbai, Jun 24 (UNI) The Reserve Bank of India has said that any unit that had defaulted in meeting its payment or repayment obligation to the lender and had also disposed of or removed the movable fixed assets or immovable property given by it for the purpose of securing a term loan without the knowledge of the bank or lender, will be declared a wilful defaulter.
In a notification issued today, the RBI quoting a supreme court order expanded the scope of definition of wilful default on its suggestion.
The Apex Bank also reiterated that no additional facilities should be granted by any Scheduled Urban Co-operative Bank to the listed wilful defaulters. In addition, the entrepreneurs / promoters of companies, where Scheduled Urban Co-operative Banks have identified siphoning / diversion of funds, misrepresentation, falsification of accounts and fraudulent transactions should be debarred from institutional finance from the Scheduled Urban Co-operative Banks, for floating new ventures for a period of five years from the date the name of the wilful defaulter is published in the list of wilful defaulters by the RBI.
These instructions will come into force with immediate effect, the Central Bank said.
UNI VK SR SKB1953