Two of India’s largest bank employee unions on Tuesday urged the central bank to review and withdraw its recent decision to allow compromise settlements for wilful defaulters saying that such a move would hurt the integrity of the banking system. Last week, the Reserve Bank of India (RBI) released a framework for lenders governing technical write-offs and compromise settlements, including those classified as fraud or wilful defaulters. Compromise settlement refers to an arrangement with the borrower to fully settle the lender’s claim upfront, which may or may not include a complete recovery of dues. A wilful defaulter is a borrower who has defaulted in meeting payment or repayment…
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