Passport Details Needed for Loans Worth Rs 50 Crore or More, Says Indian Govt

After the Punjab National Bank fraud case involving jeweler Nirav Modi made headlines, the government is making it mandatory for officials to collect passport details in case a borrower seeks loans worth Rs 50 crore.

Knowing the passport details will help banks alert relevant authorities on time to prevent fraud accused people from leaving the country, unlike what happened in cases involving jewelers Nirav Modi and Mehul Choksi, and Kingfisher Airlines’ owner Vijay Mallya. While Mallya has been classified as a willful defaulter, Modi and Choksi face charges of fraud and money laundering.

“Next step on clean and responsible banking. Passport details must for loans above Rs 50 crore. Step to ensure quick response in case of fraud,” financial services secretary Rajiv Kumar tweeted.

Next step on clean N #Responsible #banking.

Passport details a must for loans > 50 cr. Steps to ensure quick response in case of Frauds.@PMOIndia @FinMinIndia @PIB_INDIA pic.twitter.com/fcnTE3OFjH

— Rajeev kumar (@rajeevkumr) March 10, 2018

Currently, those who borrow over Rs 50 crore from banks have been told to submit passport details. Banks have been given 45 days to collect passport details of borrowers, Kumar told the Press Trust of India.

Big loan defaulters like Modi, Choksi and Mallya have fled the country, exposing the large loopholes in the recovery mechanism. 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 Rs 12,700 crore and left the country.

They have refused to return and said that recovery will be difficult since their brand Geetanjali jewelry was diminished in value due to the ongoing investigation. They are allegedly refusing to cooperate with law enforcement agencies.

According to the draft bill, assets of fraud-accused Indians can be impounded and sold by the government. It will also apply to defaulters who have outstanding loans worth Rs 100 crore or more and have fled the country.

The finance ministry directed public sector banks (PSBs) to probe all Non-Performing Asset accounts over more than Rs 50 crore for possible fraud and report them to the Central Bureau of Investigation. Banks have also been asked to monitor loans above Rs 250 crore and flag it up if there are violations.