RBI issue guidelines on publishing photographs of Wilful Defaulters

The Reserve Bank of India on Thursday, introduced guidelines on publishing of photographs of wilful defaulters for bankers. 

It was observed by the central bank that some lending institution were publishing photographs of defaulters/ guarantors in newspapers.

Considering the sensitivity involved and need of preventing the publishing of photographs of defaulting borrower/ guarantor in an indiscriminate manner, the RBI decided to chalk down some measures for lenders on publishing the wilful defaulters photographs. 

Under the measures it said," A lending institution can consider publication of the photographs of only those borrowers, including proprietors/ partners /directors / guarantors of borrower firms/ companies, who have been declared as wilful defaulters following the mechanism set out in the RBI instructions under it's book 'Master Circular on Wilful Defaulters' on July, 2015. 

The instruction was released in a move to put in place a system and to disseminate credit information pertaining to willful defaulters for cautioning banks and financial institutions so as to ensure that further bank finance is not made available to them.

Further, it said the above guidelines should not apply to the non-whole time directors who are exempted from being considered as wilful defaulters unless the special conditions, in accordance with these instructions, are satisfied.

Also, the lending institutions shall formulate a policy with the approval of their Board of Directors which clearly sets out the criteria based on which the decision to publish the photographs of a person covered in paragraph (i) above will be taken by them so that the approach is neither discriminatory nor inconsistent, it said in the release. 

Going ahead, the lending institutions shall not publish photographs of any other defaulting borrowers.