This page is for general information. It is not legal, tax or investment advice. Every NPA / SARFAESI / DRT matter is fact-specific — speak to a qualified advisor before acting.
The four RBI-defined triggers
Union Bank of India can initiate wilful defaulter proceedings only if one of four triggers is met: (i) capacity to pay but deliberate non-payment; (ii) diversion of loan funds; (iii) siphoning of loan funds; (iv) disposal of secured assets without lender consent. Each requires documentary evidence, not just suspicion.
Identification Committee stage
Union Bank of India's Identification Committee — chaired by an Executive Director with at least two General Managers — must record a specific finding on the trigger, with evidence, and issue a written show-cause notice giving the borrower at least 21 days to respond.
Personal hearing right
Post the show-cause reply, the borrower is entitled to a personal hearing before the Identification Committee — either in person or through an authorised representative. Denial of hearing is a per-se procedural defect.
Review Committee — mandatory second look
Even after the Identification Committee tags the borrower, the classification does not become final unless confirmed by Union Bank of India's Review Committee, chaired by the MD/CEO with two Independent Directors. The Review Committee must issue a reasoned order and give the borrower a fresh hearing.
CIBIL / CRILC reporting & legal effect
Only after Review Committee confirmation is the borrower reported to CIBIL and CRILC as a 'Wilful Defaulter'. From that date: no institutional credit for 5 years, director disqualification (if company borrower), promoter bar from bidding under Section 29A IBC, and possible criminal proceedings under IPC Sections 403/405/415/463.
Judicial review — writ petition at High Court
The Supreme Court in "State Bank of India v. Jah Developers" (2019) held that wilful defaulter classification is quasi-judicial and subject to writ review under Article 226. Common successful grounds: no personal hearing, non-application of mind, absence of documentary evidence for the trigger, and denial of documents relied upon by Union Bank of India.
Removal after 5 years
Post the 5-year cooling-off, the borrower can apply to {bank} for removal of the tag from CIBIL / CRILC, subject to full settlement of dues and a fresh review by {bank}'s Review Committee. Removal is not automatic — a written application and clean record are required.
Exposure above ₹50 Lakh with Union Bank of India? Speak directly to the senior desk.
Promoter and director cases are handled personally by Mr. Sharad Wardhan and our senior banking and DRT advisory team — never a telecaller. We work on consortium accounts, cash credit and term loan defaults, factory and commercial property possession under SARFAESI, and personal guarantee invocation.
- Strict NDA and confidentiality
- Senior advisor on first call
- Direct private line for directors