1 A bank borrower is treated as wilful defaulter if he meets two conditions ; 1) fails in meeting payment obligations to the lender. What is 2nd condition?
Ans borrower has the capacity to honour the said obligations OR diverted the funds availed under loans; OR siphoned off the funds availed under loans; OR disposed of assets securing the credit facility, without the approval of the lender;
2 A guarantor is classified as wilful defaulter if it meets 2 conditions : 1) does not honour the guarantee if invoked. What is 2nd?
Ans Has sufficient means or disposed of assets securing the credit facility, without the approval of the lender.
3 What is cut off amount for the purpose of action required by banks, as per RBI guidelines related to wilful defaulter ?
Ans ₹25 lakh and above
4 If wilful defaulter is a company, who will be treated as wilful defaulter, in addition to the borrower?
Ans promoters and director (s) and the persons in charge and responsible for the management of the affairs of the entity.
5 As per RBI directions, what is the amount cut of for classifying a defaulter as a Large Defaulter?
Ans ₹1 crore and above
6 In terms of RBI directions, the lenders are required to examine the ‘wilful default’ aspect in which type of accounts with outstanding amount of ₹25 lakh and above.
Ans All Non-Performing Assets (NPA) accounts
7 If wilful default is observed in preliminary screening, as per RBI directions, the lenders shall complete the process of classification/ declaring the borrower as a wilful defaulter within a period of ______, of the account being classified as Non-Performing Assets (NPA).
Ans six months
8 For a default to be categorised as wilful, three criteria must be met? It is 1) the default is intentional, 2), the default is deliberate, 3) ____
Ans The default is calculated.
9 As per RBI directions, on wilful default, who is to examine the evidence of wilful default?
Ans By an Identification Committee (IC).
10 While examining the evidence, if Identification Committee (IC) is satisfied about event of wilful default, it shall issue a show-cause notice (SCN) disclosing all materials & information and call for reply within how much period from issuance of SCN?
Ans 21 days
11 Who is authorised in the bank to issue a show-cause notice (SCN) to borrower or guarantor for declaring the borrower / guarantor, a wilful defaulter?
Ans Lenders to have board-approved policy, designating rank of the official, to issue SCN and serve written order on behalf of IC or RC.
12 After considering the reply from the defaulter, Identification Committee (IC) shall make a proposal for classification as a wilful defaulter with reasons. This proposal will be submitted to whom?
Ans Review Committee (RC)
13 If the Identification Committee (IC) decides to make a proposal for approval by Review Committee, it will inform the borrower/ guarantor about the proposal to classify them as wilful defaulter along with the reasons. In such cases, the borrower / guarantor shall be provided an opportunity for reply to Review Committee (RC) within how many days of such proposal from IC?
Ans 15 days
14 Before reaching any decision, the Review Committee (RC) shall provide an opportunity for a personal hearing to the borrower/guarantor. If the opportunity is not availed by them what action will be taken by RC?
Ans Based on facts on record, it consider the proposal of IC to take a decision.
15 If a borrower or guarantor wants to engage a lawyer to present his case before Review Committee, what will be response from the banks?
Ans For this purpose, borrower/guarantor cannot use services of lawyer.
16 If a bank wants to publish photographs of persons classified and declared as wilful defaulter what are the provisions in RBI guidelines?
Ans It can be as per a non-discriminatory board-approved policy.
17 If the name of wilful defaulter has been removed from the List of Wilful Defaulters (LWD), because he settled the due amount, can be avail any credit facility from any lender?
Ans Yes, it is possible after a cooling period of one year after the name of wilful defaulter has been removed from the List of Wilful Defaulters (LWD).
18 If the name of wilful defaulter has been removed from the List of Wilful Defaulters (LWD), because he settled the due amount, can a lender provide a credit facility for floating of new ventures?
Ans Yes, it is possible after a period of five years after the name of wilful defaulter has been removed from LWD.

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