Govt may prevent wilful defaulters from fleeing country soon

Govt may prevent wilful defaulters from fleeing country soon

Amending Passport Act :-

A government panel has recommended amending Section 10 of the Passport Act to prevent borrowers from fleeing the country. Section 10 deals with the impounding and revocation of passports.

Changes in Passport Act

  • If the recommendations are accepted, it will be a step towards ensuring that large borrowers are held accountable for non-payment of loans to banks and cannot flee the country without paying their dues.
  • The recommendations include that over a reasonably prescribed limit, wherever there is a financial risk in a particular (loan) account, the borrower will be asked to participate in the resolution of the account, and stop them from fleeing the country.
  • The government will prescribe a threshold for the loan default, beyond which the lenders will be empowered to alert enforcement agencies as per the provisions in law.

Other recent measures

  • The government has already enacted the Fugitive Economic Offenders Law to ensure that the fugitives return to the country to face prosecution.
  • The law empowers confiscation of all assets both within and outside the country for all offences where the monetary value of the offence exceeds ₹100 crore.

What data says about offenders?

  • According to data collated by the external affairs ministry, 28 Indians involved in financial irregularities had fled the country in the period between 2015 and 30 June 2018.
  • The list was compiled by the Central Bureau of Investigation and Enforcement Directorate (ED), and includes names like Mallya, Nirav Modi and his brother Neeshal Modi, Choksi and Lalit Modi.

About the Panel

  • The government panel is headed by Rajiv Kumar, secretary, Department of Financial Services in the ministry of finance.
  • Other members of the panel include representatives from Enforcement Directorate, Central Bureau of Investigation, Reserve Bank of India, Home ministry and ministry of external affairs.
  • The panel was set up after increasing instances of bank frauds were unearthed, with enforcement agencies unable to prevent the defaulters and fraudsters from fleeing the country.

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