Vol. 5 (03) pp. 1734-1747 DOI: 10.21474/IJAR01/3686

EVOLUTION OF “WILFUL DEFAULTS” MANAGEMENT IN INDIA: COMPENDIUM OF INSTRUCTIONS

and
  • Research Scholar, Gitam School of International Business, Gitam University, Visakhapatnam, India.
  • Professor, Corporate Finance, Gitam School of International Business, Gitam University, Visakhapatnam, India.
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Abstract

India is a country which discerns between “wilful” and other defaulters. The issue of wilful default by a large number of borrowers had been receiving the attention of Government of India, Reserve Bank of India, and credit institutions since 1986. This study is an attempt to critically examine the regulatory framework on “wilful defaults”. This paper has been divided into three phases. Phase I introduces the concept of wilful defaults and the scheme framed for disclosure of such information. Phase II was during 2001 to 2005, when the monitoring tools were strengthened and penal measures were framed. During Phase III greater transparency and accountability was brought in the process of identification of a “wilful” defaulter. A centralized mechanism of credit information and dissemination was put in place to alert the lenders against the borrowers who abuse the public funds and jeopardize the health of the institutions. The relevance of this study at this juncture, is very crucial for credit risk management of the financial institutions in India. A thorough understanding of the policy prescriptions would enable these institutions to employ an ex-ante approach to detect early stages of strategic defaults and thus avert high costs associated with it.

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How to Cite This Article

Lakshmi Karthik and M. Subramanyam. (2017); EVOLUTION OF “WILFUL DEFAULTS” MANAGEMENT IN INDIA: COMPENDIUM OF INSTRUCTIONS, Int. J. of Adv. Res., 5 (03), 1734-1747, ISSN 2320-5407. DOI: https://doi.org/10.21474/IJAR01/3686

Corresponding Author

LAKSHMI KARTHIK
RESERVE BANK OF INDIA
Creative Commons Attribution 4.0 This work is licensed under a Creative Commons Attribution 4.0 International License.