Banks can publish photographs of wilful defaulters only, not of any other defaulting borrowers: RBI

Mumbai, Sep 30 (KNN) The Reserve Bank of India has said the lending institutions can publish the photographs of only those borrowers who have been declared as wilful defaulters following the mechanism set out in the RBI instructions. Photographs of any other defaulting borrowers cannot be published.

In a notification, RBI said, “It has been observed that some lending institutions have been publishing the photographs of defaulters/ guarantors in newspapers.”

 In view of the sensitivity involved and need to prevent the publishing of photographs of defaulting borrower/ guarantor in an indiscriminate manner, it has been decided that 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,” said the apex bank.

RBI said 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 according to the RBI instructions will be taken by them so that the approach is neither discriminatory nor inconsistent.

The lending institutions shall not publish photographs of any other defaulting borrowers, said the central bank. (KNN Bureau)