• The Reserve Bank of India recently introduced a new policy to allow compromise settlements for wilful defaulters.
• This means that banks can settle with these defaulters by accepting a lower amount than what is owed, in certain cases.
• The bank unions in India have opposed this move, citing concerns about the impact on the banking system.
• They fear that it will encourage more people to default on loans, as they will know that they can negotiate a settlement later on.
• Bank unions also argue that this policy will benefit defaulters, some of whom may be wealthy business people or industrialists.
• They believe that the policy should be focused on assisting smaller, struggling borrowers who need more support.

In summary, the Reserve Bank of India's new policy to allow compromise settlements for wilful defaulters has been met with criticism from bank unions, who have concerns about its impact on the banking system and the potential benefits it may provide to wealthy business people.