Reserve Bank of India (Asset Reconstruction Companies – Treatment of Wilful Defaulters and Large Defaulters) Directions, 2025
UR
- Applies toAsset reconstruction companies
- StatusIn force
- IssuedNov 28, 2025
- Amendmentsnone tracked
- Length16 points in 5 sections · 2 min read
The four dates on this rule
- PublishedNov 28, 2025The day RBI put this document out. This is the same day as the Issued date on this rule.
- Starts to applyNov 28, 2025The day this rule starts to apply, as RBI's own text states it.
- Time to get readyNoneIt starts to apply on the day it was published.
- Last date to actNot statedNo date to act by was found in this document. Other dates may sit inside single paragraphs.
This rulebook is short, and the page is short with it. The whole rulebook is 1,950 words and carries the wilful default rules by reference to the commercial bank ones. Sixteen points is what it actually says.
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What it says
How firm is each point
Stated by RBI — RBI’s own paragraph says this. We have only made it plainer.
Our reading — BankPulse read RBI’s paragraph and shortened it. The paragraph is the authority, not this line.
Needs judgement — RBI leaves this to the bank to settle, so nobody can give you a fixed number here.
Opening paragraphs
1. Warn the other lenders
The rules aim to spread word of a wilful defaulter so no fresh money reaches him.
Chapter I. Preliminary
1. Wilful default for ARCs
This paper sets how asset reconstruction companies name a wilful defaulter.
2. Start date
These Directions came into effect on the day RBI issued them.
3. Who is covered
These Directions apply to every asset reconstruction company.
4. Every RBI-regulated lender
The bar on fresh money to a wilful defaulter binds every lender RBI regulates.
Chapter II. Reporting of Wilful Defaulters and Large Defaulters
Must know
1. One crore includes unapplied interest
Unapplied interest counts towards the ₹1 crore threshold.
BankPulse example. Suppose the principal outstanding is ₹98 lakh and the unapplied interest is ₹4 lakh. Together that is ₹1.02 crore. The account crosses the ₹1 crore threshold, because the interest counts.
2. 30-day list removal
ARCs must remove a name from the list within 30 days once dues fall below 25 lakh rupees.
Do it
3. Check the director details
Director details sent to the bureaus must be checked against the Registrar's database.
4. Report failed guarantors
Guarantors who do not honour an invoked guarantee must be reported to the bureaus.
Background
5. Suits go by sued amount
For a suit filed account the threshold is the amount sued for.
6. Off the list when paid
A name comes off the list only when the compromise amount is paid in full.
7. Part payment keeps the name
Part payment does not take the name off, even below the threshold.
8. Removal does not end it
Taking a name off the list does not stop criminal proceedings already begun.
9. Cancelled settlement, revised figure
If a deal is called off, the new sum owed is what gets reported.
Chapter III. Repeal and Other Provisions
1. Older rules cancelled
This document cancels the older wilful-defaulter rules for asset reconstruction companies.
2. Old cases continue
Penalties and legal cases already started under the old rules still continue.
The same subject for other kinds of institution
The same subject for other kinds of institution.
Other RBI rules for asset reconstruction companies
RBI credit bureau reporting rules for asset reconstruction companies 2025
RBI supervisory return rules for asset reconstruction companies 2026
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