In this research paper, we analyze the increasing number of wilful defaulters in India and how certain shortcomings of the banking system contribute to this. Recently, the rising incidence of NPAs has generally caused the performance of the banking sector to decline. The paper encompasses past defaults that have occurred and how they have impacted the Indian financial sector. It is important to acknowledge how a well-structured banking sector contributes to the development of a country. We have made use of secondary data from various sources to support our assumption about the increase of wilful defaulters.