Post Supreme Court ruling, banks turn wary of declaring accounts as 'wilful default'

Indian banks have refrained from declaring overdue loan accounts as fraud as the Supreme Court’s decisions make it obligatory for lenders to provide borrowers an opportunity to represent themselves before naming accounts as fraud. The lenders have made provisions instead of declaring accounts as wilful defaults. The RBI has sought comments from banks on legal and operational issues on the common detection mechanism of wilful defaulters.