Finance Ministry Now Makes Passport Details Mandatory for Loans More Than Rs 50 Cr
In the latest development, after the Union Cabinet approved the Fugitive Economic Offenders Bill, 2017 earlier this month, now make it mandatory to submit passport details for loans above Rs 50 crore which will prevent defaulters from fleeing the country.
The passport details submitted by the loan borrowers will help the bank to do regular surveillance and inform the agencies to prevent the defaulters from fleeing the country.
“Next step on clean and responsible banking. Passport details must apply for loans above Rs 50 crore. Step to ensure quick response in case of fraud,” Financial Services Secretary Rajiv Kumar tweeted.
— Rajeev kumar (@rajeevkumr) March 10, 2018
For all existing loans of Rs 50 crore and above, banks have been asked to collect passport details within 45 days, says an official release. “This is a preventive step to avoid the flight of economic offenders,” he added.
The Union Cabinet had approved the Fugitive Economic Offenders Bill, 2017 after the Nirav Modi-PNB scam came to light.
The proposed bill says that if the borrower is not able to pay the loan of Rs 100 crore and above, the Court will issue a notice to the person. Within six weeks from the date of the notice, the person will have to present themselves at a designated place given by the court. If the offender fails to do so, they will be declared a ‘fugitive economic offender’ and their properties will be confiscated which will help to recover the dues quickly. This is also applicable for those who have escaped the country.
According to Zee News, the Finance Ministry last week had directed public sector banks (PSBs) to probe all NPA accounts of over Rs 50 crore for possible fraud and accordingly report the cases to CBI, as part of a drive to clean the banking system.
The decision of making passport details mandatory for the loan of worth Rs 50 crore and more is a much-needed step taken by the government which will prevent the fraudsters from fleeing the country.