Loan Restructuring & Willful defaulter
Benchmark Parameter for Restructuring
- Viability – Within 5 Years
- Repayment – Within 10 Years
- Promoter Contribution – 20%
Classification
Additional Loan – Remain Standard for One Year
Existing Loan – Upgraded to Standard category after regular repayment for 1 year
Willful Defaulter – RBI Guidelines (Based on Kohli Comittee)
One who has defaulted in loan payment and
1) he has the the capacity to pay the loan or
2) loan used for different purpose
3) fund used for unrelated to the business (Shiphon-Off)
4) unauthorized sale of loan security
Committee headed by ED in a bank declares willful defaulter after giving an opportunity to the borrower and he gets 15 days to respond.
CMD has to review before declare of willful defaulter
If loan amount is greater than or equal to 25 lac, report has to made to all credit information companies for suit filed.
If loan amount is less than 25 lac, reporting to Credit Information companies is not required.
Action by Other Bank of Willful Declaration
1. No Additional Loan
2. No Loan to new project of defaulter for 5 years
