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Passport details must for loans above Rs. 50 crore
Everyone in the economy is well aware of the Punjab National Bank (Nirav Modi) fraud of Rs. 12500 crore occurred last month, which drove all the big entrepreneurs, industrialists and all other financial institutions into astonishment. Several big defaulters like Nirav Modi, Mehul Choksi, Vijay Mallya fled the country after taking huge loans.
Gone were the days when Government took several months and years to pass any law or frame any regulatory measure. This is a perfect example of the active step taken by the Government within few days of this unexpected fraud. Taking into consideration such fraud cases that are occurring frequently, the Financial Services Secretary, Rajiv Kumar said that “All the Public Sector Banks (PSBs) are now required to collect the passport details of borrowers taking loan of more than Rs. 50 crore, so that information is quickly available in case any loan-taker or defaulters flees the country. In case of already disbursed loans, the existing borrowers are required to furnish their passport details within 45 days”.
Last week the Cabinet has also passed the Fugitive Economic Offenders Bill, 2018, which would facilitate action against big defaulters.
I think, this step taken by the Government will facilitate clean banking, ensuring quick response in case of frauds. The borrowers before taking loans, simply with the intention of committing frauds, will think twice and avoid taking such loans. This step will motivate the farmers and other small borrowers to repay the loan installment on timely basis resulting into reduced number of NPA accounts.
In my opinion, this move by the financial services secretary will prove to be fruitful in the near future and will benefit the whole economy as a whole.
Name : Shivani Khandelwal
She is CA final student, currently associated with M/s SSRPN. & Co., As an Article Assistant.
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