SEBI Bhavan, Head Office of Securities and Exchange Board of India in MumbaiWikiCommons/JimmyVikas

India's capital markets regulator, the Securities and Exchange Board of India (Sebi) said Saturday that wilful (loan) defaulters won't be able to access the capital markets for raising funds. Such persons won't be allowed to occupy board positions as well.

Besides, such defaulters won't be able to set up market intermediaries such as mutual funds and brokerage firms or take control of any other listed company, the Press Trust of India quoted Sebi as saying.

Reuters reports that under Indian law, willful defaulters are classified as firms or individuals "who deliberately thwart repayment of dues to lenders."

U.K Sinha, chairman of Sebi, said the new rules on restraining wilful defaulters would come into effect once notified.

"After the notification, all such persons would stand disqualified from all positions at listed companies," he said, reported PTI.

Such restriction is part of government efforts to tackle bad loans already weighing on state-owned banks.

Union Finance Minister Arun Jaitley was also present at the meeting.