• Bank unions are opposing RBI's decision to allow compromise settlement for wilful defaulters because it is seen as a soft approach towards those who have deliberately refused to repay their loans.
• According to bank unions, wilful defaulters should not be given any leniency and their assets should be seized to recover the outstanding dues. Compromise settlements may allow them to get away with a fraction of what they owe.
• Furthermore, bank unions argue that such a move may set a wrong precedent, where defaulters could intentionally default on their loans, knowing they can settle for a nominal amount later.
• The opposition is also fueled by the fact that banks have been struggling with mounting bad loans for years, and unions fear that compromise settlements could lead to further losses for banks, considering the already fragile financial state of many of them.
• Lastly, unions believe that instead of going for easy settlements, the RBI should focus on strengthening the framework to prevent wilful defaults altogether. This could include stricter laws against such defaults and fast track processes for asset recovery.

Overall, the decision to allow compromise settlements for wilful defaulters has not gone down well with bank unions, as it could be seen as a lenient approach to those who have refused to repay their loans.