Sebi in touch with RBI on dealing with wilful loan defaulters

Capital markets regulator Securities and Exchange Board of India (Sebi) said on Monday that it was in consultation with the Reserve Bank of India on regulations around wilful loan defaulters and would be finalising norms on the same soon.

"We are in consultation with the Reserve Bank of India for finalising the wilful defaulter regulations ," Sebi Chairman U K Sinha told reporters on the sidelines of an event at the BSE in Mumbai.

The banking watchdog has reportedly been mulling a ban on capital raising activities by such entities.

RBI is devising ways of sharing real time information on such activities with the capital market regulator.

It can be noted that there has been a steep jump in defaults in the recent times. While many of the cases are due to systemic stress due to the economy's poor show, there have been cases of wilful defaults by company promoters as well.

With allegations about the latter on the rise, some banks have adopted the practice of naming such 'wilful loan defaulters' who fail to repay their debts inspite of ability.

Some lenders are also mulling to declare Vijay Mallya, the promoter of one of the biggest NPA for banks, Kingfisher Airlines, as a 'wilful defaulter'.

Meanwhile, Sinha also said that the Sebi board which meets later this week would discuss the way forward on the Real Estate Investment Trusts and Infrastructure Investment Trusts.

It would, however, not discuss insider trading norms, he said.