The Reserve Bank of India (RBI), on November 28, 2025, issued the Reserve Bank India (Urban Co-operative Banks – Treatment of Wilful Defaulters and Large Defaulters) Directions, 2025.
The following has been stated:-
• A UCB shall require their internal auditors to specifically look into adherence to instructions for classifying a borrower as a wilful defaulter.
• The Audit Committee of the UCB shall periodically review the cases of wilful default and recommend steps to be taken to prevent such occurrences and their early detection should these occur. The review shall focus on identifying root causes of wilful default and addressing deficiencies, if any, in the wilful defaulter classification process adopted by the UCB.
[Notification no. RBI/DOR/2025-26/288 DOR.FIN.REC.No.207/20-16-003/2025-26]
