Wilful defaulter
ESG & GovernanceA borrower that does not repay a bank loan despite being able to, or that diverts or siphons off the borrowed money.
Banks classify borrowers as wilful defaulters under RBI rules, after a set review process. The label also extends to promoters and directors responsible for the default. Wilful defaulters lose access to new bank finance and face restrictions on raising money in the capital markets. The classification is a strong governance signal, because it means a lender has concluded that the default was a choice, not just bad luck.
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