What does WGWD mean in BANKING
Working Group on Wilful Defaulters (WGWD) is a committee created by the Reserve Bank of India to identify and deal with financial frauds in the banking system. The WGWD was formed in 2017, based on a recommendation from the Financial Stability Board (FSB), to address the issue of wilful default. The aim of this group was to formulate measures to ensure greater levels of transparency and accountability in the banking system, while also addressing any potential instances of willful non-payment/delay by promoters or borrowers.
WGWD meaning in Banking in Business
WGWD mostly used in an acronym Banking in Category Business that means Working Group on Wilful Defaulters
Shorthand: WGWD,
Full Form: Working Group on Wilful Defaulters
For more information of "Working Group on Wilful Defaulters", see the section below.
Importance Of Working Group On Wilful Defaulters (WGWD)
The primary goal of WGWD is to identify and prevent wilful defaults in the banking system. To achieve this objective, WGWD takes various proactive measures like monitoring accounts, reviewing credit limits, scrutinizing high-value borrowings, and conducting forensic investigations if necessary. Additionally, it also works closely with investigative agencies such as Central Bureau of Investigation (CBI), Enforcement Directorate (ED), Serious Fraud Investigation Office (SFO) etc., to investigate cases related to willful defaults and recommend punitive actions against defaulters. WGWD’s efforts have helped improve recovery rates and reduce exposure to bad debt for banks.
Concluding Remarks
The Working Group on Wilful Defaulters (WGWD) has been instrumental in curbing financial frauds within the banking system since its establishment in 2017. By monitoring suspicious transactions and collaborating closely with law enforcement agencies, it has been able to recover large amounts of bad loans from defaulters and protect banks from losses caused due to wilful defaulting. It has also ensured greater transparency and accountability within the banking sector. As such, WGWD has become an indispensable tool for protecting financial institutions from potential risks posed by fraudsters operating within this sector.
Essential Questions and Answers on Working Group on Wilful Defaulters in "BUSINESS»BANKING"
What is a Working Group on Wilful Defaulters (WGWD)?
WGWD is an inter-agency group set up by the Government of India to review the progress made for resolution of cases related to wilful defaulters. The group consists of representatives from multiple agencies including Indian Banks Association (IBA), Reserve Bank of India (RBI) and Financial Intelligence Unit (FIU).
What are the responsibilities of WGWD?
The main responsibilities of WGWD are to take appropriate action in cases involving wilful default, analyze cases where prosecution has been initiated and review non-performing assets of banks. Additionally, the group also provides guidance to banks for making effective use of available legal remedies in such cases.
How does WGWD help in resolving cases related to wilful defaults?
WGWD helps in resolving cases related to wilful defaults by monitoring and reviewing loan repayments along with identifying and analysing any discrepancies that exist. It also helps banks identify opportunities for better recovery strategies to resolve these cases in an efficient manner.
What is meant by ‘wilful default’?
Wilful default is defined as the situation when a borrower i.e., a person or company intentionally defaults on loan repayment despite having sufficient funds to make payments towards the dues incurred. This may include situations when parties choose not to pay back loans despite other options being available and when borrowers do not use loan proceeds for the purpose it was granted for.
Who can be considered as ‘wilful defaulter’ under these guidelines?
Wilful defaulter can be any individual or entity which has deliberately defaulted on its loan repayment obligations despite possessing sufficient financial resources/cash flow to clear their outstanding liabilities; diverting funds obtained under credit facility for purposes other than that agreed upon; suppressing facts or furnishing false information while availing credit facilities from bank/s amongst several other acts mentioned in with RBI Circular No DNBS213/CGM(US)-2015 dated February 4, 2015
What happens if someone is declared as a 'wilful defaulter'?
If someone is declared as a wilful defaulter, they will have limited access to further borrowings from lenders due to financial institutions blacklisting them. In addition, banks will initiate various legal proceedings against them including civil suits and criminal proceedings in order to recover their dues from these entities. These proceedings can further result in attachment orders issued against them resulting reduced liquidity levels.
How does one avoid being labelled as a wilful defaulter?
To avoid being labelled as a wilful defaulter one should ensure timely repayment of all dues accepted under any borrowing arrangement with banks and should always abide by terms mentioned within such agreements while using borrowed funds solely for intended purposes only. Additionally, relevant documentation should be maintained at all times, making sure all details regarding utilisation of debt fund remain true, accurate & updated regularly.
How do I know if I am listed as a 'wilful defaulter’?
You can find out whether you are listed as a 'Wilful Defaulter' through your respective lending institution directly or through online public databases like Credit Information Bureau (India) Limited (CIBIL). Alternatively you could also contact WGWD for more information regarding this matter.