According to officials aware of the deliberations, the Indian Banks Association, or IBA, and National E-governance Services Ltd. (NeSL) are working to further improve the reporting system, which will now capture data on ‘declaration of fraud’ and ‘declaration of wilful default,’ a move that is expected to fast-track the process of establishing defaults and verify claims expeditiously.
As per the latest data available from NeSL, the default rate is highest in the debt size range of Rs 10-100 crore.
A senior bank executive confirmed the development and said that under the new format, all banks will be providing such information to NeSL.
“This will be mandatory for banks to report all cases of fraud on the NeSL platform,” he said, adding that this will lead to more transparency and facilitate faster redressal.
One of the proposed amendments to the Bankruptcy Code is that the adjudicating authority, or AA, will only rely on the record of the default available with the IUs to determine if a default has taken place and that such a record will be conclusive proof about the occurrence of a default.