Current Affairs Quiz 10 June 2024

Answer: B

Answer and Explanation:
Answer: (a) 1 only
Explanation:
• Statement 1 is correct. The GNSS-based ETC system uses Global Navigation Satellite System (GNSS) technology to monitor vehicles and compute tolls based on the distance traveled on tolled highways.
• Statement 2 is incorrect. The National Highways Authority of India (NHAI) aims to integrate the GNSS-based ETC system with the existing FASTag ecosystem. Initially, a hybrid model will be used where both RFID-based ETC and GNSS-based ETC will function simultaneously, rather than replacing the FASTag ecosystem entirely.
Therefore, only statement 1 is correct.

Answer and Explanation:
Answer: (a) 1 only
Explanation:
• Statement 1 is correct. LOCs must be issued by officers not below the rank of district magistrate or superintendent of police, or a deputy secretary in the Union Government.
• Statement 2 is incorrect. The Bombay High Court recently ruled that PSBs cannot issue LOCs against alleged loan defaulters without a specific law or statute, citing it as a violation of fundamental rights. This decision nullified the 2018 Government Office Memorandums that had authorized banks to issue LOCs.
Therefore, only statement 1 is correct.

Correct Answer : A

About Wilful Defaulter:
• Wilful defaulters are entities that have the ability to repay money but intentionally fail to do so.
• The concept of ‘Wilful Defaulter’ was introduced by the Reserve Bank of India (RBI) through its Master Circular, which defined the term and provided guidelines for banks and financial institutions to determine instances of wilful default.

Criteria for Wilful Default:
According to the RBI, a wilful default is deemed to have occurred in the following circumstances:
• When there is a default in repayment obligations by a unit (company/individual) despite having the capacity to repay, indicating a deliberate intention not to repay the loan.
• When funds obtained for a specific purpose are diverted for other uses.
• When funds have been siphoned off and not utilized for the intended purpose, without any justifiable assets to account for the usage.
• When assets purchased with lenders’ funds are sold off without the knowledge of the bank/lender.
• In cases where group companies of wilfully defaulting units fail to honor guarantees or letters of comfort provided to lenders when invoked, such group companies are also considered wilful defaulters.

Consequences of being a Wilful Defaulter:
• Banks and institutions are required to submit the list of suit-filed accounts of wilful defaulters to Credit Information Bureau (India) Ltd (CIBIL) on a quarterly basis.
• Banks report the names of current and former directors associated with the defaulter at the time of classification, which serves as a warning to other financial entities.
• A wilful defaulter is prohibited from starting a new business for a period of five years from the date of being declared as such.
• Lenders are expected to initiate legal action, including criminal proceedings if necessary, against the defaulting borrowers/guarantors, expediting the recovery process.
• Banks and institutions have the authority to change the management of a wilfully defaulting company.
• While there is no specific law for legal action against wilful defaulters, banks can initiate action under existing laws such as the SARFAESI Act, Companies Act, 2013, Fugitive Economic Offenders Act, etc.
• Overall, the designation of wilful defaulter carries significant consequences for the entities involved, aiming to discourage deliberate non-repayment and promote accountability in the financial system.

Ans: c