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Money News

RBI simplifies 'non-cooperative' borrower classification

Commuters travel past a Reserve Bank of India (RBI) building in Kolkata November 11, 2014. REUTERS/Rupak De Chowdhuri/Files

MUMBAI (Reuters) - The RBI has simplified the definition of a non-cooperative borrower to include all those who have the ability to pay but still thwart lenders’ efforts to recover their dues, including by not providing necessary information.

“In effect, a non-cooperative borrower is a defaulter who deliberately stonewalls legitimate efforts of the lenders to recover their dues,” the Reserve Bank of India notified on Monday.

The new definition of a non-cooperative borrower replaces one the Reserve Bank of India issued in February, which had set several criteria including not providing required information even after two reminders from lenders.

RBI Governor Raghuram Rajan has made improving asset quality at lenders one of his priorities, and has publicly admonished “wilful defaulters” for eroding faith in the banking system.

Link to the circular: (bit.ly/1wUZTqX)

Reporting by Neha Dasgupta; Editing by Sunil Nair

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