Genuine defaulter a fallacy, says RBI deputy governor Vishwanathan

A defaulter, whatever the reason may be, is still a defaulter and there is no reason for the regulator to treat him differently. But the banking system can always extend help by offering resolution to promoters willing to pay up, said Reserve Bank of India (RBI) deputy governor NS Vishwanathan.

“The proponents of this line of thought argue that where the borrowers are affected by external factors beyond their control, they should be treated as ‘genuine’ defaulters and some leniency in prudential norms is warranted. This is a fallacy, even though it is important to appreciate that some defaults are inevitable