Wilful defaulters may soon need Govt's permission to go abroad

New Delhi: A government committee has recommended that wilful defaulters with loans exceeding Rs 50 crore must take prior approval for travel outside India. The recommendation by a committee headed by financial services secretary Rajiv Kumar is part of a crackdown on with the wilful defaulters fleeing the country, a report by the Economic Times said.

The panel has submitted its report to the government and has recommended tightening the Passport law to prevent defaulting promoters and fraudsters like Vijay Mallya, Nirav Modi and Mehul Choksi from fleeing the country.

"It was recommended that Section 10 of the Indian Passport Act may be amended to provide that persons who are in wilful default of loans above a specified limit of debt may be treated as financial and economic risk in public interest," a government official was quoted as saying by the daily.

The official said that the specified limit may be set at Rs 50 crore. Section 10 of the Indian Passport Act deals with the impounding and revocation of passports.

These recommendations assume significance in view of reports of fugitive diamantaire Mehul Choksi moving to Antigua, an island nation in the West Indies, from the US and getting a local passport of the Caribbean country.

Choksi, involved in over $2 billion scam in Punjab National Bank, is believed to have acquired the citizenship of Antigua last year.

Earlier in March, the Finance Ministry had asked public sector banks (PSBs) to collect passport details of all those borrowers who have borrowed loans of more than Rs 50 crore. The banks have also been asked to introduce modifications in the loan application form issued to a borrower to incorporate his or her passport details.

The PNB fraud worth Rs 13,000 crore had come to light in February and allegedly involves Nirav Modi and his uncle Choksi. By the time, the central agencies were alerted, they had already fled the country.

Mallya had fled the country in March 2016 after defaulting on loans given to Kingfisher Airlines, which was promoted by his group. Moreover, Parliament passed Fugitive Economic Offenders Bill, 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 law is aimed at quickly recovering losses to exchequer or PSBs in cases of frauds.