Government charts plan to stop loan defaulters from taking flight
The government has set up a committee to identify measures aimed at stopping defaulting promoters from fleeing the country and avoid a high-profile repeat of departures such as those of Nirav Modi and Vijay Mallya, said a top official. This will include a check on possible dual citizenship.
Headed by financial services secretary Rajiv Kumar, the committee has representation from the Reserve Bank of India, the ministries of home and external affairs, the Enforcement Directorate and the Central Bureau of Investigation.
It will suggest mechanisms and whether changes are required in existing laws. “We will focus on those promoters who have citizenship of any other country and have not declared the same,” the finance ministry official said.
If the loan accounts of these promoters are under stress or their companies have defaulted on payments, the government may also seek details of any overseas travel they’re planning, he said. A loan default takes some time to evolve into a non-performing asset and it’s even longer before any fraud is uncovered.