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Clipping wings? Banks to collect big borrowers' passport details in 45 days

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

Press Trust of India  |  New Delhi 

Income Tax,enforcement directorate, ED,Gitanjali groups,SEZ, income tax act, Mehul Choksi,Punjab national bank, PNB, Enforcement Directorate (ED), Prevention of Money Laundering Act (PMLA), diamond merchant nirav modi, jewellery designer nirav modi,
Security guards stand inside Nirav Modi showroom in New Delhi (Photo: Reuters)

The 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 preventing alleged fraudsters like and from fleeing the country, sources said.

In case the borrower does not have a passport, the 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, and have fled the country putting recovery mechanism in quandary.

Last week, the Cabinet approved the Fugitive Economic Offenders Bill, though it was announced in the Budget for 2017-18, has been hastened after and his uncle allegedly defrauded state-owned (PNB) of Rs 127 billion and left the country and are refusing to cooperate with law enforcement agencies.

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 and

The chaired by also approved setting up of a (NFRA) 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 drive to clean the banking system, the last week had directed public sector banks (PSBs) to probe all NPA accounts of over Rs 500 million for possible fraud and accordingly report the cases to

"PSB MDs directed to detect frauds & consequential wilful default in time & refer cases to To examine all NPA accounts > Rs 500 million for possible fraud," had said in the tweet.

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 for PSBs in January.

First Published: Wed, March 07 2018. 08:07 IST