Lenders seek anonymity for officers tagging wilful defaulter accounts
Reserve Bank of India (RBI) on shielding the identities of officers who spot wilful defaulters and build cases against errant borrowers, said bankers aware of the development. A recent High Court order has directed banks to name the employees on committees identifying a borrower as a wilful defaulter.
The division bench order about Milind Patel, director of IFIN versus Union Bank of India, also asked the bank to provide the petitioner full access to the relevant documents and material on record. This is yet another contentious issue between lenders and the borrower. The Union Bank had argued that it is not obliged to provide evidence to the borrower as per the RBI guidelines. Lenders will seek RBI's guidance on this issue, too, the bankers cited above said.
The bank management lobby, the Indian Banks Association (IBA), will soon seek advice on ways to address this issue.
The RBI has issued draft guidelines on the process that banks must follow in tagging a borrower as a wilful defaulter, and final guidelines have yet to be issued.
The RBI draft norms stress the need to give the borrower an in-person hearing and put in place an identification and review committee. However, the draft guidelines do not mention naming the employees on the committee. Banks are concerned mainly because High Court and apex court orders would supersede a banking regulator's guidelines.
«The lender teams that take the decisions consist of salaried staff members. The borrowers being questioned are almost always well-to-do businessmen,
