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Government has directed Banks to ‘name and shame’ the Wilful Defaulters

March 13,2018:

Government has directed Banks to ‘name and shame’ such borrowers by publishing their photographs and other details in newspapers.

High Profile Bank Loan defaulters
High Profile Bank Loan defaulters

Finance Ministry has written a letter to all state-run banks directing them to take board approvals for publication of photographs of such defaulters.

Sources from Advisory of Finance Ministry has stated that,”Lending institutions shall formulate a policy with the approval of their board of directors which clearly set out the criteria for publication of photographs of wilful defaulters.”

Number of wilful defaulters, who did not repay loans to public sector banks (PSBs) despite the capacity to do so, rose to 9,063 at the end of December 2017.

Amount involved for PSBs is reported as Rs 1,10,050 crore, Minister of state for finance Shiv Pratap Shukla had said in a written reply in the Lok Sabha

Taking forward its fight against wilful defaulters, the government last week directed banks to seek passport details of borrowers taking loans of Rs 50 crore and more. Passport details will help banks to take timely action and inform the relevant authorities to prevent fraudsters from fleeing the country.

Financial Services Secretary Rajiv Kumar stated that,”Next step in clean and responsible banking. Passport details must for loans above Rs 50 crore. Step to ensure quick response in case of fraud”.

He stated that,”For all the existing loans of over Rs 50 crore, banks have been asked to collect passport details of borrowers within 45 days, he added.

Several big defaulters like Nirav Modi, Mehul Choksi, Vijay Mallya and Jatin Mehta have fled the country putting the recovery mechanism in quandary.

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