Banking · Credit Management
The Reserve Bank of India has issued comprehensive master directions regarding the classification of borrowers as wilful defaulters. Based on the current regulatory framework, which of the following criteria would lead to a borrower being classified as a wilful defaulter?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The borrower is a non-executive director of a company that has defaulted without any personal involvement or knowledge of the fraud.
- 2The borrower has failed to pay the installments due to a genuine business downturn caused by a global recession.
- 3The borrower has defaulted in repayment and has diverted funds for purposes other than those for which the finance was originally granted.✓
- 4The borrower has defaulted in repayment obligations and the total outstanding amount is less than 25 lakh rupees.
Correct answer
The borrower has defaulted in repayment and has diverted funds for purposes other than those for which the finance was originally granted.
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