I've read through the comments and most of them complains of lack of transparency on the banks' side in reporting customers as defaulters. I was shocked to see people being listed as defaulters in CIBIL for as low as Rs 148, making them unable to get approval for any loans.
Finally, RBI has issued guidelines to the entire process of dealing with defaulters. RBI makes clear that banks should communicate with the customer before listing him as a defaulter and should try to settle the case as far as possible instead of listing him.
Full copy of the guidelines can be availed at Master Circular_on_Wilful_Defaulters
