Banks may soon take passport details for granting loans above Rs 50 crore

In a bid to avoid financial defaulters from fleeing the country after cheating banks, India's finance ministry may ask the public sector banks (PSB) in the country to seek the passport details of the borrowers while sanctioning loans above Rs 50 crore. The ministry's move comes in the wake of the Punjab National Bank (PNB) scam in which diamantaire Nirav Modi left the country allegedly after cheating the bank of over Rs 12,000 crores. 

"The finance ministry may ask state-run lenders to seek the certified passport details of borrowers with an exposure of Rs 50 crore and above to help prevent them fleeing the country in case of default or wrongdoing of any kind," a senior government official told Economic Times. The government is also planning to table the Fugitive Economic Offenders Bill in the Parliament, the official added.

"By seeking certified copies of their passport, we believe there will be additional pressure on the promoters as they will be aware that they can be stopped at the airport if they try to flee," he added.

It is expected that this might help prevent defaulters and fraudsters from leaving the country by cheating banks. The new directions are likely to help the investigation agencies like the Enforcement Directorate (ED) or the CBI in nabbing the offenders before they escape to safe havens abroad.

The latest move and the proposed bill gain significance in the backdrop of the recent multi-crore PNB scam and the other scams including the Vijay Mallya case.  Nirav Modi and his partner Mehul Choksi had left India and were reportedly spotted in New York. 

Also, the government continues its effort to bring Vijay Mallya back from London who left Indian shores in March 2016. He is facing charges of bank loan defaults of over Rs 9,000 crore in the Kingfisher Airlines fraud case.

The Union Cabinet on Thursday (March 1) approved the proposal of the finance ministry to introduce Fugitive Economic Offenders Bill (FEO) 2018 in Parliament. The bill seeks to protect the interests of the lenders in India when the economic defaulters flee the country to escape the law.

The bill proposes to confiscate the assets of financial offenders who escape the country after committing financial malpractices in India. Offenses worth Rs 100 crore or more come under the ambit of the proposed bill.