Ministry orders to collect defaulters’ passports

In case the borrower does not have a passport, the bank 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 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. Last week, the Cabinet approved the Fugitive Economic Offenders Bill, though it was announced in the Budget for 2017-18, has been hastened after Nirav Modi and his uncle Mehul Choksi allegedly defrauded state-owned PNB of Rs 12,700 crore 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. The Union Cabinet chaired by the PM also approved setting up of a National Financial Reporting Authority as an independent regulator for the auditors.

Meanwhile, Finance Minister Arun Jaitley said the fraud-hit PNB has “sound fundamentals” and high potential to raise capital through sale of non-core assets.

“With a high share of current account and savings account deposits, low cost-to-income ratio, robust credit growth, stabilisation of gross non-performing assets, healthy provision coverage ratio of over 60 pc and high potential for mobilising capital through sale of non-core assets, PNB too has sound fundamentals and strong growth potential,” the Minister said in a written reply to Rajya Sabha. “These position PNB for sustained good performance and, going forward, generating positive market sentiment and market capitalisation gains.”