Being a developing country, India has felt the waves of liberalization and globalization since 1991. It soon leads to a compelling requirement of financial system and thus gave a spur to the credit requirement in the market. As the volume of credit, credit agencies and credit beneficiaries increased manifold, a simultaneous increase in the risks and fraud associated with the credits also followed. A need was felt by the Authorities for surveillance of such delinquencies. CIBIL (Credit Information Bureau (India) Limited), India's first credit information Bureau, was set up in the year 2001 jointly by banks and financial institutions. The establishment of CIBIL was with the motive of improving the financial system thereby reducing the chances of Non Performing Asset (NPA).
A scheme was framed by Reserve Bank of India (RBI) in April, 1999 wherein the banks and notified financial institutions were required to submit to RBI the details of willful defaulters who made defaults of Rs. 25 lakhs and above. Further, wilful default hovered in the financial system and then the Reserve Bank of India, in consultation with the Government of India, constituted in May 2001, a Working Group on Wilful Defaulters (WGWD).
