Bombay High Court establishes precedent: Banks must provide reasoned orders before declaring entities/persons as wilful defaulters under RBI's Master Circular.

Bombay High Court sets precedent: Banks, financial institutions must pass reasoned orders before declaring entities/persons wilful defaulters under RBI's Master Circular. Reasoned orders should be shared by banks' Identification & Review Committees. Discretion in invoking Master Circular should be exercised with caution, as wilful defaulters are ostracized from the financial sector.

March 21, 2024
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