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Passport details made mandatory for loans above Rs50 crore after PNB fraud

14 March 2018

Taking a lesson from Punjab National Bank scam, Finance Ministry in a statement said that passport details will be mandatory for availing loans more than Rs 50 crores from state-run banks.

Knowing the passport details will help banks alert relevant authorities on time to prevent fraud accused people from leaving the country, unlike what happened in cases involving jewelers Nirav Modi and Mehul Choksi, and Kingfisher Airlines' owner Vijay Mallya.

The central government has been classified as a willful defaulter but Modi and Choksi are facing fraud and money laundering charges.

Any borrower seeking a loan of over Rs 50 crore from any bank will have toprovide her passport details. As per the reports, Rajiv Kumar, secretary, department of financial services wrote on Twitter that,"Next step on clean and responsible banking. Step to ensure quick response in case of fraud".

Currently, those who borrow over Rs 50 crore from banks have been told to submit passport details.

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Rajeev Kumar further said that for existing cases of loans above Rs.50 crore the banks are asked to collect passport details of the borrowers within 45 days.

Punjab National Bank (PNB) lost Dollars 431 million or over Rs 2,800 crore to various frauds last fiscal year, the government said on Friday, making it the biggest such loser among all state-owned banks even before it uncovered an alleged Rs. 12,000 crore fraud this year.

Law enforcement agencies had previously attributed Rs6,138 crore of the alleged PNB fraud amount to Gitanjali, and almost Rs6,500 crore to companies controlled by Modi. It will also apply to defaulters who have outstanding loans worth Rs 100 crore or more and have fled the country.

PNB, the second largest state-run bank, had on February 14 informed the exchanges of detecting Dollars 1.77 billion fraud at its Brady House branch in Horniman Circle area of south Mumbai and named the firms led by Modi and his uncle Mehul Choksi's Gitanjali Group and some other diamond and jewelry merchants as suspects.

Besides, the ministry had asked banks to monitor loans above Rs 250 crore and red flags whenever the original covenants of the loans are violated.

Passport details made mandatory for loans above Rs50 crore after PNB fraud