Module: | KYC, NPAs, Advances & Investment Valuations
Q160: Under the Reserve Bank of India (Treatment of Wilful Defaulters and Large Defaulters) Directions, when is a "wilful default" deemed to have occurred?
1. A borrower defaults despite having the capacity to honour the obligations.
2. A guarantor refuses to honour the guarantee despite having sufficient means.
3. A borrower defaults due to verifiable market volatility.
4. A guarantor defaults but holds no assets in their name.
2. A guarantor refuses to honour the guarantee despite having sufficient means.
3. A borrower defaults due to verifiable market volatility.
4. A guarantor defaults but holds no assets in their name.
✅ Correct Answer: A
Wilful default occurs if a borrower defaults despite having the capacity to pay.
It also occurs if a guarantor refuses to honour the guarantee despite having means.
It also occurs if a guarantor refuses to honour the guarantee despite having means.