MUMBAI (TIP): Market regulator Sebi on Thursday notified rules aimed at banning wilful defaulters from raising money from the markets. The rules will impact companies and individuals categorized as ‘wilful defaulter’ by the RBI. The entities who could be banned include promoters and directors of a company, as well as the company.
The Sebi move comes at a time when the government and the RBI are fighting a menace that is partially responsible for the huge pile-up of non-performing assets (NPAs), mainly in public sector banks. Earlier in March this year, when the controversy around loan default by flamboyant Indian businessman Vijay Mallya was at its peak, the Sebi board had taken a decision on banning wilful defaulters from the market. It has now been notified.