New Delhi: Taking precautionary measures against loan dodgers flying abroad, ministry of finance has compiled a list of 91 defaulters barring them from leaving the country.
According to a report by Bloomberg, India has compiled a list of 91 people it is considering detaining from flying out of the country because of their involvement with companies that have defaulted on loans.
The list of people has been collated based on they being directors or owners of Indian companies which have been identified as wilful defaulters, firms which refuse to repay loans despite having the means to do so.
Banks have also been asked to provide passport details of a larger group of individuals who have signed applications or stood as guarantors for soured credits of more than Rs 500 million.
Earlier, the Reserve Bank of India (RBI) barred banks from issuing the letters of undertaking — the credit guarantee instrument at the heart of the fraud — with immediate effect.
That move followed revelations of what has been dubbed the biggest fraud in India's banking history, in which two jewellery groups allegedly colluded with Punjab National Bank (PNB) employees to get fraudulent letters of undertaking which helped them raise credit of about $2 billion from overseas branches of Indian banks.
“It is logical that someone accused of an offence is not allowed to leave the country because extradition requires proof of criminal offence and it is difficult to establish this beyond doubt,” Aditya Puri, the chief executive officer of HDFC Bank Ltd., told Bloomberg. “Banks are custodians of public money.”
“Those who had funneled money overseas hoping to flee if the recovery push comes to shove will be worried,” Kranthi Bathini, director of Mumbai-based financial advisory company WealthMills Securities Pvt told Bloomberg. “While some horses have already bolted to countries with tough extradition laws, it is not yet too late to close the gates.”
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