As India grapples with the biggest banking sector fraud and rising loan default by large entities, its government yesterday approved a tough new bill that has the provision for confiscating assets without conviction in cases where the offenders flee the country.
The Fugitive Economic Offenders Bill was approved at a meeting of the federal cabinet led by Prime Minister Narendra Modi.
The bill, which is likely to be brought before Parliament in the second half of the budget session beginning March 5, will be applicable to financial offenders who refuse to return from abroad willfully defaulting on loans with outstanding over Rs 100 crore.
The bill comes against the backdrop of billionaire diamond merchant Nirav Modi defrauding Punjab National Bank, India's second largest bank, of more than $1.77 billion. He along with his family left India in the first week of January.
“The Fugitive Economic Offenders Bill 2018 has been brought for confiscation of assets of a fugitive, including Benami [on others' name] assets. There will also be the provision for confiscating those assets outside India but co-operation of that country will be needed,” said Indian Finance Minister Arun Jaitely.
It provides for confiscating assets even without conviction and paying off lenders by selling off the fugitive's properties. Such economic offenders will be tried under the Prevention of Money Laundering Act, official sources said.
Besides, Nirav Modi, alleged economic offenders Vijay Mallya, liquor baron and owner of now-defunct Kingfisher Airlines, and former Indian Premier League chairman Lalit Modi are also abroad after having defaulted on bank loans running into hundreds of crores of Rupees.