The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (All India Financial Institutions – Treatment of Wilful Defaulters and Large Defaulters) Directions, 2025.
The following has been stated namely: -
• It establishes a transparent, non-discriminatory framework for identifying borrowers who have the capacity to repay but willfully default. The direction mandates that lenders shall complete classification of a wilful defaulter within six months of an account becoming a Non-Performing Asset and sets new criteria (such as failure by promoters to infuse agreed equity) for such classification.
• It further requires that once classified, wilful defaulters and entities associated with them are barred from accessing fresh credit facilities and are subject to adverse credit reporting and publication of their details.
• In addition, the direction imposes stringent reporting obligations on all regulated entities, including banks, NBFCs, and credit-information companies, to ensure the dissemination of information on large and wilful defaulters to prevent further institutional financing.
• This shall come into force from November 28, 2025.
[Notification no. - RBI/DOR/2025-26/333 DOR.FIN.REC.No.252/20-16-003/2025-26]
