Sources quoting advisory of the finance ministry said, Lending institutions shall formulate a policy with the approval of their board of directors which clearly set out the criteria for publication of photographs of wilful defaulters.
The number of wilful defaulters, who did not repay loans to public sector banks (PSBs) despite the capacity to do so, rose to 9,063 at the end of December 2017.
The amount involved for PSBs is reported as Rs 1100.50 billion, Minister of State for Finance Shiv Pratap Shukla had said in a written reply in the Lok Sabha
Taking forward its fight against wilful defaulters, the government last week directed banks to seek passport details of borrowers taking loans of Rs 500 million and more. Passport details will help banks to take timely action and inform the relevant authorities to prevent fraudsters from fleeing the country.
For all existing loans of over Rs 500 million, banks have been asked to collect passport details of borrowers within 45 days, he added.
The government has tabled the Fugitive Economic Offenders Bill after Nirav Modi and his uncle Mehul Choksi allegedly defrauded state-owned Punjab National Bank (PNB) of Rs 127 billion and left the country and are 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 also will apply to defaulters who have an outstanding of Rs 1 billion or more and have escaped from the country.
Besides, the ministry had asked banks to monitor loans above Rs 2.5 billion and red flags whenever the original covenants of the loans are violated. This was spelt out as part of 6-point-reform measures announced.