PSU Banks Asked To Take Passport Details For Loans Above Rs 50 Crore

The finance ministry has directed state-owned banks to obtain passport details of all borrowers, who have taken loans in excess of Rs 50 crore within 45 days, with a view to prevent alleged fraudsters like Nirav Modi and Vijay Mallya from fleeing the country, sources said.

In case the borrower does not have a passport, the bank should obtain a certificate in the form of declaration that the person does not have the passport, sources said quoting the finance ministry's advisory to banks.

It further said that the loan application form should be suitably modified to incorporate passport details of borrowers.

Passport details will help banks to take timely action and inform the relevant authorities to prevent fraudsters from fleeing the country, sources said.

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 like Nirav Modi, Mehul Choksi, Vijay Mallya and Jatin Mehta have fled the country putting recovery mechanism in quandary.

Also Read: PNB Fraud: Passports Of Nirav Modi, Mehul Choksi Revoked

Last week, the Cabinet approved the Fugitive Economic Offenders Bill, though it was announced in the Budget for 2017-18, has been hastened after Nirav Modi and his uncle Mehul Choksi allegedly defrauded state-owned Punjab National Bank of Rs 12,700 crore and left the country and are refusing to cooperate with law enforcement agencies.

Also Read: Cabinet Approves Fugitive Economic Offenders Bill

The Bill provides for confiscating all assets of absconding fraudsters and loan defaulters to recover dues in a bid to tighten noose around fugitives like diamond merchant Nirav Modi and Vijay Mallya.

The Union Cabinet chaired by Prime Minister Narendra Modi also approved setting up of a National Financial Reporting Authority as an independent regulator for the auditors.

The proposed fugitive law aims to impound and sell assets of Nirav Modi-type escapees with a view to quickly recover dues. It also will apply to defaulters who have an outstanding of Rs 100 crore or more and have escaped from the country.

As part of the drive to clean the banking system, the Finance Ministry last week had directed public sector banks to probe all NPA accounts of over Rs 50 crore for possible fraud and accordingly report the cases to CBI.

"PSB MDs directed to detect bank frauds & consequential wilful default in time & refer cases to CBI. To examineall NPA accounts > Rs 50Cr for possible fraud," Financial Services Secretary had said in the tweet.