Name & Shame Matter By Govt Bank

896 votes

The Reserve Bank of India (RBI) has said banks can publish photographs of only those borrowers who have been declared wilful defaulters as per the central bank’s guidelines. Asking the banks not to indiscriminately publish photographs of defaulters and guarantors in newspapers, the RBI directed the lending institutions to formulate a policy in this regard. “It has been observed that some lending institutions have been publishing the photographs of defaulters/ guarantors in newspapers,” the RBI said. It said the direction is in view of the sensitivity involved and need to prevent the publishing of photographs of defaulting borrower/ guarantor in an indiscriminate manner. As part of their strategy to ‘name and shame’ defaulters, banks, mostly public sector lenders, began publishing pictures of loan defaulters in newspapers and at other places around the areas of residence of such borrowers to force them to pay up. This exercise was later extended to the guarantors of loan defaulters as well as part of efforts to build pressure on the borrowers to clear their dues. However, several borrowers had protested against this practice to the RBI and the government.

Advocate Pramod Panwar LawRato