Explain the reasons in brief for the following statements in the context of practices prevailing under the banking : (i) Additional credit facilities are not extended by the bank to wilful defaulters or group defaulters.

Wilful defaulters are those who have not effected repayment of the loans despite generating profits by diverting funds. They do not follow the terms and conditions of the advance and are not desirable/dependable customers. RBI has also advised that the borrower whose name appears in the list of wilful defaulters released by them should not be financed for at least 5 years from the date of the release. In this case of group borrowers, non-payment by one/two borrowers affect the group image and pose problems for the bank in renewal/recovery of the loan.