Preventing Loan Defaulters’ Flight From Country: Panel Formed To Examine Existing Laws And Suggest Mechanisms

A panel headed by Finance Services Secretary Rajiv Kumar has been formed to prevent flight of loan defaulters from the country, Economic Times has reported. The committee has representatives of Reserve Bank of India (RBI), Central Bureau of Investigation (CBI), Enforcement Directorate (ED), Ministry of External Affairs and Home Ministry. The committee is expected to examine current laws and suggest necessary changes if necessary.

A finance ministry official told that promoters of companies who have not declared their foreign citizenship would be under the government's focus. Details of foreign travel of promoters whose loans are under stress would also be sought by the government according to the report. If specific information suggesting that a promoter could become a fugitive from justice is available, passport of promoter in question could be revoked. Banks have reportedly sought the passport details of large borrowers for this purpose.

The government has brought in Fugitive Economic Offenders Ordinance, 2018 and has listed the bill in the agenda for upcoming parliament session. The bill allows investigative agencies to confiscate assets of persons declared as economic offenders by courts. This provision is expected to act as a deterrent to those who seek to escape jurisdiction of Indian courts. The ED has already approached courts to declare Nirav Modi as an economic offender.