Daily Archives: June 20, 2023

Does RBI circular dilute the penal measures on borrowers classified as wilful defaulter or fraud?

In view of 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 central bank in a follow-up on Monday issued FAQs (Frequently Asked Questions) related to its June 8 circular. RBI denied that it has introduced a new clause permitting…

What is Technical write-off, is it a normal banking practice?

Regulated Entities like banks and NBFCs may undertake technical write-offs in loan accounts that are either considered unrecoverable or whose recovery is likely to consume disproportionate resources of the lenders. The board approval will be required for compromise settlements or technical write-offs for accounts categorised as wilful defaulters or fraud. As for technical or prudential…