Rising NPAs, loan frauds drive banks to detectives’ alley

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Published: June 19, 2016 9:54:22 AM

With these cases having gained prominence recently in the wake of some huge defaults like those by Kingfisher Airlines and its owner Vijay Mallya, banks have brought out advertisements and approached private detective agencies to mine information against fraudsters.

Indian rupee vs US dollarAs per a fee chart prepared by a leading bank, it will pay Rs 7,500 (in a single case) to the snoop agency for providing data about people connected to the defaulter like the borrower, guarantor or director of the firm. (Reuters)

Burgeoning cases of non-performing assets (NPAs) and piling loan frauds have led banks to private detectives for conducting ‘undercover’ operations to unearth hidden data against defaulters who have cheated them of crores of rupees before vanishing into thin air.

With these cases having gained prominence recently in the wake of some huge defaults like those by Kingfisher Airlines and its owner Vijay Mallya, banks have brought out advertisements and approached private detective agencies to mine information against fraudsters.

As per official records, a number of banks have sought empanelment of detective agencies with their assets recovery divisions to not only “locate the missing/absconding NPA defaulter” but also to “ascertain their present occupation, income streams among others”.

A large public sector bank recently sought help to tackle the NPA menace and wants private sleuths to “unearth uncharged properties of the defaulter for recovery action with the help of documentary evidences”.

“We have been helping the banks on these issues for quite a few years now but this time there is pressure on them to catch not only the small but also the big fish. Private detective agencies are working on thousands of such case across the country.

“In order to ensure that the banks get vital information on defaulters and absconders, our agents are conducting undercover operations as we cannot go and just knock on the doors to obtain such information in these cases,” Chairman of the Association of Private Detectives of India (APDI) Kunwar Vikram Singh told PTI.

He said despite the job requiring special skills to conduct covert operations, the APDI’s collective success rate in tracing bank defaulters has been as much as 90. He said absconders and fraudsters many a time exist “right under the nose” but under a changed identity.

Singh said his detective firm Lancers Private Limited is at present working with banks like SBI, Bank of India and Bank of Patiala on such cases many of which have come to it in the recent past.

A banker at a leading lending institution said a number of banks have sought help of the APDI in this regard in the recent past.

“The banks are up against some of the smartest brains when it comes to non-payment of loans and huge defaults. There is not much staff with any of us to physically get information against such entities and hence private detectives hold the key to this problem.

“It is ensured that when we bring on board a detective agency we enter into a confidentiality agreement with them called the NDA (Non-Disclosure Agreement) which mandates that such snoop information about the defaulter will be protected from any public disclosure,” he said.

As per a fee chart prepared by a leading bank, it will pay Rs 7,500 (in a single case) to the snoop agency for providing data about people connected to the defaulter like the borrower, guarantor or director of the firm.

In case the detectives get documentary proof of assets (not in records of the banks) of the defaulter which can be attached, an amount of Rs 20,000 for each such property located will be paid.

“We have collected property papers worth hundreds of crore against such defaulters in the past. This is a very specialised job and we have deployed some of our best agents for the task,” Director of a Delhi-based snoop firm Hatfield Detectives Pvt Ltd Ajit Singh said.

Banks have also sought from these agencies, as per the scope of work agreement, some non-traditional sources of information against the defaulters which the bank “cannot access by utilising normal channels like CIBIL database, internet and local enquiries.”

An agreement brought out by one of the banks states that private sleuths need to “locate the borrower, co-borrower, guarantor, mortgagor, including their legal heirs who are either untraceable or not available at the addresses given in bank’s records.”

Detectives also need to “ascertain latest information about their present address, occupation, businesses, income streams, details of all their assets, their location, whether in India or abroad, and value and ownership related information.”

“Government investigative agencies like police, CBI, Income Tax department or the Enforcement Directorate have their limitations. Banks also have manpower issues in their special debt recovery units. Getting private detectives on board will surely get us the desired results as past experiences have not been bad in this domain,” the banker said.

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