Bank unions AIBOC and AIBEA have opposed the Reserve Bank’s move to allow lenders to settle loans of wilful defaulters under compromise settlement
The RBI‘s recent ‘framework for compromise settlements and technical write-offs’ is a detrimental step that may compromise the integrity of the banking system, unions said
It may undermine the efforts to combat wilful defaulters effectively, unions added
As key stakeholders in the banking industry, we have always advocated for strict measures to address the issue of wilful defaulters,” All India Bank Officers’ Confederation AIBOC and AIBEA said in a statement
RBI in its ‘Prudential Framework for Resolution of Stressed Assets’, made clear that the borrowers who have committed frauds/malfeasance/wilful default will remain ineligible for restructuring
Unions called upon the RBI to review and withdraw this decision
They said the central bank should prioritize the protection of the interests of honest borrowers and depositors who rely on the integrity of the banking system
Now this sudden change in the framework by the RBI to grant compromise settlements to wilful defaulters came as a shocker