The penal measures that can be taken against willful defaulters are outlined in RBI circular DBR.CID.BC.No.22/20.16.003/2015-16 dated July 1, 2015. In this regard, RBI made an observation that the Photographs of defaulters/guarantors are published indiscriminately by some of the lending institutions.
In this context, the apex bank has directed lending institutions as under.
(i) 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 referred to above. This shall 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.
(ii) 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 is also directed by RBI in its circular that the lending institutions SHALL NOT PUBLISH PHOTOGRAPHS of any other defaulting borrowers.