1. SFIO probing cases of fund diversion by loan defaulters

SFIO probing cases of fund diversion by loan defaulters

The Serious Fraud Investigation Office (SFIO) is investigating cases of fund diversion by loan defaulters and suitable action will be taken against the guilty, a senior official said.

By: | New Delhi | Published: June 7, 2017 9:47 PM
Serious Fraud Investigation Office, loan defaulters, Arun Jaitley, Section 447 of the Companies Act, SFIO, NPA, CBI, Finance Ministry, Loan accounts, Loan, Companies Act, 2013, RBI Loan accounts where there are suspicions of fund diversion are being probed by SFIO and in some cases the agency has sought information from banks and the Department of Financial Services.

The Serious Fraud Investigation Office (SFIO) is investigating cases of fund diversion by loan defaulters and suitable action will be taken against the guilty, a senior official said. “90 per cent case of NPAs may be because of business decision going wrong or global economic slowdown but there are remaining 10 per cent cases which need to be investigated and various agencies including CBI and SFIO are looking into them,” a senior Finance Ministry official told PTI. Loan accounts where there are suspicions of fund diversion are being probed by SFIO and in some cases the agency has sought information from banks and the Department of Financial Services, the official added. Without naming any company on SFIO’s radar, the official said some steel and infrastructure firms are being investigated. If it finds any wrongdoing, it will file complaints to relevant authorities as SFIO is only an investigation agency and can prosecute only after approval from the Ministry of Corporate Affairs, the official said. Section 447 of the Companies Act, 2013 deals with the punishment for fraud.

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Bad loans rose by over Rs 1 lakh crore in the first nine months of last fiscal to Rs 6.07 lakh crore as of December 31, 2016. Gross NPA of PSBs stood at Rs 5.02 lakh crore at the end of March 2016, up from Rs 2.67 lakh crore at the end of March 2015. Finance Minister Arun Jaitley has repeatedly said that the problem of bad loans is not systemic but is limited to 30 -50 accounts. “It is not a problem spread over hundreds or thousands of accounts and given the size of the Indian economy, it is possible to deal with the NPAs,” Jaitley had said. Last month, the government promulgated the Banking Regulation (Amendment) Ordinance, 2017, giving more powers to the RBI to deal with stressed assets. The Central government can also direct the SFIO to examine company accounts under Section 212 of the Companies Act, 2013.

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