Passport details compulsory against loans higher than Rs 50cr

In the wake of recent scams unearthed in the banking sector, the Centre on Saturday directed public sector banks (PSBs) to collect passport details of new borrowers seeking to avail loans higher than Rs 50 crore.

Announcing another step towards clean and responsible banking, Department of Financial Services (DFS) Secretary Rajeev Kumar stated that banks will be required to mould their loan application forms according to the new rule, and therefore help the government avoid the flight of economic offenders.

In case of existing cases of sanctioning loans above the stipulated amount of Rs 50 crore, passport details have to be submitted by the borrower to the respective banks within 45 days.

A number of banking cams have come to the forefront in the recent past, the most prominent one being the 1.77 billion dollar Punjab National Bank (PNB) fraud involving top jewellery designer Nirav Modi and others, thereby creating a greater nudge for complete privatisation of PSBs.

Earlier in February, the DFS secretary had announced a 15-day deadline to the PSBs to take "pre-emptive" action for identifying gaps and to gear up for rising operational and technical risks.

Following this, the government had also directed PSBs to consolidate nearly 35 overseas operations without affecting the banks' international presence in these countries in order to improve cost efficiency and synergies in the overseas market.

In this regard, 69 operations were identified for further examination, including bank branches, joint ventures, subsidiaries, remittance centres and representative offices.

The Ministry of Finance had confirmed that a total of 216 overseas operations would be examined to ease the rationalisation of overseas operations.