India Considering Barring 91 Loan Offenders From Leaving Country

A list of 91 people that the government is considering barring from leaving the country has been created.

(Photo: iStockPhoto)

As the government is struggling to extradite loan defaulters who have fled India to avoid prosecution, it is now hoping to stop others from leaving.

A list of 91 people that the government is considering barring from leaving the country has been created, Bloomberg reported quoting a person with knowledge of the matter.

The list contains names of directors and owners of companies that have been identified as willful defaulters.

Willful defaulters are companies that refuse to repay their loans despite having the means to do so. About 400 Indian companies have been classified as willful defaulters.

The government has also asked for the passport details of individuals who have applied for or stood as guarantors for credits of more than Rs 50 crore. These individuals may also be barred from leaving the country if found to have engaged in fraud or willful default, Bloomberg further reported, quoting the same source.

This reform comes after two billionaire jewelers - Nirav Modi and Mehul Choksi - left India right before their names came up in the nation’s biggest bank fraud.

Within a month since the first details of the fraud emerged, a new bill was introduced to give authorities the power to seize assets of the offenders, people who have fled the country for offences worth Rs 100 crore or more.

With the Lok Sabha Elections coming up next year, the government is under pressure to act against the offenders. The Indian regulator has also started working towards cleaning up $210 billion of bad loans in the banking system.

Finance Ministry spokesman DS Malik didn’t respond to calls made by Bloomberg to ask for comment on the government’s further steps.

(With inputs from Bloomberg)