Banking Circles Welcome Circular On Wilful Defaults

The master circular on wilful defaulters issued by the Reserve Bank of India (RBI) defines a "wilful default" as occurring when: a "unit" defaults in its payment/repayment obligations to a lender even though it has the capacity to make such payments; a unit defaults in its payment/repayment obligations to a lender, and has not used the finance raised from the lender for the specific purposes for which it was sanctioned and has diverted the funds for other purposes; a unit defaults in its payment/repayment obligations to a lender and the funds raised have been siphoned off and are not available with the unit in the form of other assets; or a unit defaults in its payment/repayment obligations to a lender and has also disposed of or removed the movable fixed assets or immovable property given by it as security for the purpose of securing the financing without the knowledge of the lender.