Modi govt plans a way to stop future 'Nirav Modis' from fleeing the country

The Corporate Affairs Ministry is considering a proposal to collect passport details of people serving as directors on the boards of companies as part of efforts to prevent fraudsters from fleeing the country, according to a senior official.
The proposal assumes significance amid instances of people leaving the country after defaulting on bank loans and siphoning of funds.

The ministry, which is implementing the Companies Act, has stepped up efforts to curb illicit fund flows and has already deregistered more than 226,000 firms for not carrying out business activities for long.
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Corporate Affairs Secretary Injeti Srinivas has said the ministry is considering a proposal to collect passport details of directors of companies.
"The passport details at the digital warehouse will help authorities to take timely action and check fraudsters from fleeing the country," he said in a message published in the ministry's newsletter for the month of March.
Query sent to the Secretary seeking comments on the current status of the proposal did not elicit any response.
Last year, the ministry had disqualified over 300,000 persons for holding directorships at registered companies that failed to comply with regulatory requirements.
According to the newsletter, posted on the ministry's website, there have been several instances of economic offenders fleeing the jurisdiction of Indian courts, anticipating commencement of criminal proceedings which undermines the rule of law in India.
To deal with such issues, the government last month promulgated the Fugitive Economic Offenders Ordinance, 2018, giving authorities powers to attach and confiscate the proceeds of crime and properties of economic offenders like bank fraudsters or loan defaulters fleeing the country.
The Ordinance makes provisions for Special Court under the Prevention of Money-laundering Act, 2002 to declare a person as a Fugitive Economic Offender.
Among others, it provides for an application being made before the Special Court for a declaration that an individual as a fugitive economic offender, attaching his or her properties and proceeds of crime and selling of such properties.

PNB scam: Govt makes passport details must for loans of Rs 500 mn and above

Passport details of borrowers taking loans of Rs 500 million (Rs 50 crore) and more have been made mandatory to ensure swift action in case of fraud and to prevent fraudsters from fleeing the country, a top official said on Saturday.
The passport details will help banks to take timely action and inform the relevant authorities to prevent fraudsters from fleeing the country.
"Next step on clean and responsible banking. Passport details must for loans above Rs 500 million (Rs 50 crore). Step to ensure quick response in case of fraud," Financial Services Secretary Rajiv Kumar tweeted.
This is a preventive step to avoid the flight of economic offenders, said Kumar, adding that banks were to collect passport details of all new borrowers of loans in excess of Rs 500 million (Rs 50 crore).

For all existing loans of over Rs 500 million (Rs 50 crore), banks have been asked to collect passport details of borrowers within 45 days, he added.
ALSO READ: Scam-hit PNB may need to provide for around Rs 60 bn in losses this quarter
In the absence of passport details, banks were hamstrung in taking timely action to prevent defaulters, especially wilful ones, from fleeing the country.
Several big defaulters like Nirav Modi, Mehul Choksi, Vijay Mallya, and Jatin Mehta have fled the country, putting the recovery mechanism in a quandary.
ALSO READ: PNB fraud fallout: Loan disbursements to corporate India take a hit
Last week, the Cabinet approved the Fugitive Economic Offenders Bill after Nirav Modi and his uncle Mehul Choksi allegedly defrauded state-owned Punjab National Bank (PNB) of Rs 127 billion (Rs 12,700 crore) and left the country. Modi and Choksi are refusing to cooperate with law enforcement agencies.
The proposed fugitive law aims to impound and sell assets of Nirav Modi-type escapees with a view to quickly recover dues. It will also apply to defaulters who have an outstanding of Rs 1 billion (Rs 100 crore) or more and have escaped from the country.
ALSO READ: PNB scam fallout: RBI asks banks for details of LoUs as far back as 2011
As part of a drive to clean the banking system, the Finance Ministry last week had directed public sector banks (PSBs) to probe all NPA accounts of over Rs 500 million (Rs 50 crore) for possible fraud and, accordingly, report the cases to the CBI.
Besides, the ministry had asked banks to monitor loans above Rs 2.5 billion (Rs 250 crore) and raise a red flag whenever the original covenants of the loans are violated. This was spelt out as part of a six-point reform measure announced for PSBs in January.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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No orange colour passports and printing of last page to continue: MEA

The external affairs ministry on Tuesday announced that it has reversed its decision on the issuance of an orange-coloured passport to those who have ECR status as also on printing of the last page with personal details.
The decision was taken at a meeting, chaired by External Affairs Minister Sushma Swaraj and attended by one of her two deputies V K Singh among others, yesterday, the ministry said.
Based on the recommendations of a three-member committee comprising officials of MEA and the women and child development ministry, it was decided not to print the last page of the passport booklet, the MEA said in a release.
The ministry had earlier decided to issue a passport with orange colour jacket to passport holders with ECR status, with a view to help and assist them on priority basis, it said.
However, "the MEA has received several individual and collective representations requesting to reconsider these two decisions... the decision of the MEA on both these issues was reviewed in the light of these representations," it said.
After comprehensive discussions with the various stakeholders, "the MEA has decided to continue with the current practice of printing of the last page of the passport and not to issue a separate passport with orange colour jacket to ECR passport holders", the release said.
The MEA decision was criticised by political parties, including the Congress which said the separate orange colour passports to ECR category shows the BJP's "discriminatory mindset".