Name and shame strategy for wilful defaulters

While the naming of large sized corporate borrowers-turned wilful defaulters is permissible, officials say a similar action can be initiated against individual defaulters. 

A PSB official says, “On the C&I front (Corporate and Investments), there are genuine defaulters – businessmen who have suffered a loss, and wilful defaulters – who take loans and diverts funds to show a business loss. The latter’s photos and names can be published and can be treated as a criminal case. For non-corporate customers with loan defaults exceeding Rs 10 lakh, a Recovery Officer through the appointment of a Commissioner, can take the possession of the property of the borrower.” 

A leading corporate lawyer says loans disbursed in priority sectors – education and agriculture are done considering the risk of non-repayment, at the bank’s discretion and CIBIL rating which validates credit-worthiness.