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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

Reserve Bank of India (Non-Banking Financial Companies - Treatment of Wilful Defaulters and Large Defaulters) Directions, 2025

28-Nov-2025 | RBI/DOR/2025-26/358 DOR.FIN.REC.No.277/20-16-003/2025-26

RBI has issued Reserve Bank of India (Non-Banking Financial Companies - Treatment of Wilful Defaulters and Large Defaulters) Directions, 2025 effective from 28th Nov, 2025. Applicability- Applicable to NBFC-ML and upper layers, including NBFC-D, NBFC-ICC, NBFC-MFI, NBFC-Factor, NBFC-IFC, IDF-NBFC, HFCs, and CICs. Key Highlights of these directions: 1. NBFCs must adopt a Board-approved policy covering Procedure for issuing notices and orders, Periodic re-examination of accounts, Criteria for publishing photographs of wilful defaulters, Measures for verifying end-use of funds and Threshold for conducting forensic audits. 2. Standardised Framework for Identifying Wilful Defaulters - NBFCs must follow a two-stage committee mechanism for the Identification Committee to review evidence and issue show-cause notices and for Review Committee to provide a hearing and pass reasoned orders. - The process must adhere to principles of natural justice and be completed within six months of an account becoming NPA. 3. NBFCs must report: - Large defaulters monthly to all CICs in Annex I format. - Wilful defaulters monthly in Annex II format, including both suit-filed and non-suit filed accounts. 4. Before transferring a defaulted loan of Rs. 25 lakh, NBFCs must complete wilful default assessment. In IBC or RBI-led resolution cases with change in management, the borrower?s name is removed from the list, though restrictions continue to apply to erstwhile promoters/directors. 5. NBFCs may report negligent auditors or third parties involved in facilitating wilful default to NFRA/ICAI/IBA. For more information, kindly refer to the attached document.

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