Passport details to help curb fraud: Rajiv Kumar
Passport details of borrowers taking loans of ~500 million and more have been made mandatory to ensure a swift action in the case of fraud and to prevent fraudsters from fleeing the country, a top official said on Saturday.
Passport details will help banks to take timely action and inform the relevant authorities to prevent fraudsters from fleeing the country.
“Next step on clean and responsible banking. Passport details must for loans above ~50 crore (~500 million). Step to ensure quick response in case of fraud,” Financial Services Secretary Rajiv Kumar tweeted.
This is a preventive step to avoid flight of economic offenders.
For all existing loans of over ~500 million, banks have been asked to collect passport details of borrowers within 45 days, he added.
In absence of passport details, banks were hamstrung in taking timely action to prevent defaulters especially wilful one from fleeing the country.
Several big defaulters such as Nirav Modi, Mehul Choksi, Vijay Mallya and Jatin Mehta have fled the country putting the recovery mechanism in quandary.
Last week, the Cabinet approved the Fugitive Economic Offenders Bill after Nirav Modi and his uncle Mehul Choksi allegedly defrauded state-owned Punjab National Bank (PNB) of ~127 billion and left the country and were refusing to cooperate with law enforcement agencies.
The proposed fugitive law aims to impound and sell assets of Nirav Modi-type escapees with a view to quickly recover dues. It will also apply to defaulters, who have an outstanding of ~1 billon or more and have escaped from the country.
As part of drive to clean the banking system, the Finance Ministry last week had directed public sector banks (PSBs) to probe all NPA accounts of over ~500 million for possible fraud and accordingly report the cases to CBI.