In order to avoid high profile loan defaulters fleeing the country, the Modi government is considering a plan to bar 91 individuals involved with companies, which have defaulted on loans.
As per a Bloomberg report, the Modi government has compiled a list of 91 individuals who are either directors or owners of about 400 Indian companies which have been classified as wilful defaulters. Wilful defaulters are defined as those entities who have a capacity to repay loans but are refusing to do so.
Besides this, the government has also asked the banks to provide passport details of all the borrowers who have taken loans in excess of Rs 50 crores. In case a fraud or wilful default gets detected for loans above Rs 50 crores, the passport details need to be shared with the foreign ministry for their inclusion in the watchlist to ensure they don’t flee the country.
The Modi government has also introduced a bill enabling the authorities to impound assets of fugitive offenders, who have fled India after committing economic offences of more than Rs 100 crores.
In total it is speculated that about 31 Indian have fled the country for avoiding prosecution.
So if indeed the 91 wilful defaulters are banned from going abroad, it might ensure no Vijay Mallya like situation is encountered in the future, where a businessman flees abroad to avoid being brought to book for loan defaults.
Even in case of jeweller Nirav Modi, who is accused of defrauding Punjab National Bank (PNB) to the tune of Rs 11,000 crores, a case of loan default has come to light. As per reports, Nirav Modi’s key aide was questioned by the CBI a few days back, regarding an alleged Rs 321.88 crore loan default case registered against the disgraced jeweller.
Another measure to curb wilful defaults was noted in form of, India tweaking its bankruptcy code, to prevent wilful defaulters from bidding on their own company at an auction. This prevented the scenario of crooked businessmen getting control of their own insolvent assets at a heavy discount.