Reserve Bank of India tweaks definition of 'non-cooperative' borrower

The Reserve Bank of India (RBI) has simplified the definition of a non-cooperative borrower to include all those who have the ability to pay but still thwart the efforts of banks to recover their dues, including by not providing necessary information.

"In effect, a non-cooperative borrower is a defaulter who deliberately stonewalls legitimate efforts of the lenders to recover their dues," the RBI notified in a circular on Monday.

The new definition of a non-cooperative borrower replaces the one that the central bank issued in February, which had set several criteria including not providing required information even after two reminders from lenders.

RBI Governor Raghuram Rajan has made improving asset quality at lenders one of his priorities, and has publicly admonished 'wilful defaulters' for eroding faith in the country's banking system.

(Reuters)