#wilful defaulter

The Calcutta High Court struck down wilful defaulter orders because the same official participated in both identifying and reviewing the default, violating the principle of impartial adjudication. This ruling reinforces that RBI’s procedural safeguards require truly independent review bodies - affecting all banks and corporate directors facing classification under the Master Directions.

Calcutta High Court sets aside RBI's wilful defaulter notice against BSCPL, ruling that invocation of a corporate guarantee alone-without proof of fund siphoning, asset disposal, or repayment capacity-does not meet the statutory threshold under RBI's 2025 Directions. The judgment reinforces natural justice safeguards for guarantors facing regulatory action.

Calcutta High Court sets aside a wilful defaulter declaration against guarantors for failing to provide critical documents or reasoned orders, reinforcing that procedural fairness mandates full disclosure and transparency in banking proceedings. The ruling directs fresh proceedings with strict adherence to natural justice principles, impacting lenders' obligations under RBI guidelines.