With an aim to prevent alleged financial fraudsters such as Nirav Modi and Vijay Mallya from leaving the country, the government has asked public sector banks to collect passport details of all those borrowers who have borrowed loans worth more than Rs 50 crore, PTI reported citing unidentified sources. The Finance Ministry has allotted 45 days time period to the PSU banks to obtain the passports, PTI report said citing same sources. Those borrowers with no passports will have to submit a declaration certificate with the bank that they don’t own one, PTI reported citing Finance Ministry’s advisory to banks. The banks have also been asked to introduce modifications in the loan application form issued to the borrowed to incorporate passport details of the borrowers, the report added.
The government is of the view that such an action will help it to take timely action against such fraudsters and also help them prevent fleeing the country, the report added. Up till now, banks are unable to take timely action against such offenders in want of their passport details. Lately, alleged bank defaulters namely Nirav Modi and Vijay Mallya fled the country leaving banks in uncertainty over the loan recovery. Billionaire diamond merchant Nirav Modi has been accused of defrauding Punjab National Bank (PNB) of Rs 12,700 crore by colluding with a few of the bank officials who issued fake Letters of Undertaking (LoU) that allowed his companies to raise credit from a few of the overseas branches of the Indian Banks. Enforcement Directorate (ED) and Central Bureau of Investigation (CBI) have since then conducted various raids across the country on the places associated with Nirav Modi, his uncle Mehul Choksi (the other co-accused) and their companies.
The Cabinet has also come out with the Fugitive Economic Offenders Bill last week after announcing it in Budget 2018. The bill provides confiscation rights of loan defaulters who have fled the country. In a recently held Union Cabinet meeting chaired by Prime Minister Narendra Modi, an approval was given to establishing a National Financial Reporting Authority (NFRA) as an independent regulator for the auditors.