Talking about the norms for non-cooperative defaulters, the RBI governor said the guidelines have been formulated to tackle those borrowers who resist repaying at every corner and hold up the entire repayment process
Reserve Bank of India (RBI) Governor Raghuram Rajan on Tuesday said the central bank is in the process of redefining the definition of wilful defaulters to bring directors of defaulting companies under its ambit.
"The (Calcutta High) Court had some questions about whether all directors could be declared wilful defaulters and we have looked at that. We are in the process of modifying the definition so that the directors, if seen, as culpable in actively participating or being grossly negligent of wilful default," Rajan said at the customary post-policy interactions with the media.
According to the current definition, a wilful defaulter is somebody who has essentially not used the funds for the purpose it has been borrowed or when he has not repaid when he can do so; when he has siphoned off the funds or when he disposed of the assets pledged for availing of loan without the bank's knowledge.
Recently, United Bank of India declared Kingfisher Airlines as well as some three of its directors as wilful defaulters. The decision of the single bench, that accepted the bank's position, was later stayed by a division of the Calcutta High Court last weekend.
Talking about the norms for non-cooperative defaulters, Rajan said the guidelines have been formulated to tackle those borrowers who resist repaying at every corner and hold up the entire repayment process.
He said in such cases, the recourse to legal remedy, allowable by the laws from a prudential perspective, imposes a cost to the system because banks cannot get their money using the existing laws such as the Sarfesi Act.
"Therefore, in those situations where there is a deliberate attempt to delay the process of recovery after due process is being followed, can we find a way of declaring these borrowers as non-cooperatives?," Rajan asked.
On the rising non-performing asset (NPA) levels in the system, the RBI governor said the central bank is following the issue very closely and banks have been asked to take timely action to deal with the matter.
In the banking system, NPAs rose to 4.1% as of the June quarter, while the total stressed assets including the recast loans rose close to 11%.
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The Union Minister of Women and Child Development, Maneka Sanjay Gandhi gave away certificates of increased pension to the first ten pensioners
The Union Minister of Women and Child Development, Maneka Sanjay Gandhi presided over a function to launch the New Guaranteed Minimum Pension Scheme of Government of India in Dehradun. The Minister gave away certificates of increased pension to first ten pensioners. The government announced the launch of a guaranteed minimum pension of Rs1,000 per month under the Employees Pension Scheme, 1995.
Under the new scheme, the pension has been increased from Rs650 to Rs1,000. Also, the maximum wage limit for eligibility has been increased from Rs6,500 per month to Rs15,000 per month.
Speaking on the occasion, Maneka Gandhi said that this measure has been taken by the government to provide increased social security to workers through the Pension Scheme.
The Minister said that the pension is a small token of gratitude which the nation pays to workers who spend a life time in building the nation through their hard work. Maneka Gandhi also explained the benefits of integrating Jan Dhan Yojana and Employees Scheme which will now enable the Pension to go directly into the accounts of the workers.
The Minister also gave a preview of Swachch Bharat Yojana of the government and its critical applicability to an environmentally fragile state like Uttarakhand.