India has formally designated 15 individuals and companies as fugitive economic offenders, including nine who are related to large-scale financial frauds committed against public sector banks, which have resulted in losses exceeding ₹26,000 crore, Minister of State for Finance, Pankaj Chaudhary, stated in the Lok Sabha. Including the interest, the total amount stands at ₹31,437 crore, of which ₹19,187 crore has already been recovered by banks.

The Union minister, on the second day of the Winter Session of Parliament, was asked about the number of persons declared as fugitive economic offenders till date under the Fugitive Economic Offenders Act, 2018, especially in cases related to large-scale financial frauds committed against public sector banks; the details of total financial loss; and the number of fugitive economic offenders who have negotiated loan settlement under One Time Settlements (OTS) so far.

Also, the government was asked about the name and number of persons involved in the settlement, and whether the government is formulating any policy to ensure that in future, economic offenders are legally banned or put on a watch list before leaving the country.

The junior minister in the finance ministry informed that despite aggressive recovery efforts, only two fugitives have secured a one-time settlement. Of the total more than ₹26,600 crore in principal amount stuck in fugitive economic offender cases, SBI and PNB, the biggest PSU banks, together account for over ₹17,000 crore in principal exposure.

SBI, however, has managed to recover around ₹11,395 crore, the highest among all the banks. PNB, however, has so far recovered around only ₹1,619 crore. Several other banks, such as Union Bank, UCO Bank and Bank of Baroda, have also recovered ₹1,316 crore, ₹882 crore, and ₹1,167 crore, respectively.

Four businessmen with whom PSBs have high exposure are former Firestar Group’s Nirav Modi and uncle Mehul Choksi, former Kingfisher Airlines chairman Vijay Mallya, Sterling Group’s Nitin Sandesara & Chetan Sandesara, and Zylog Systems’ Sudarshan Venkatraman and Ramanujam Sesharathnam.

Through another question in the Rajya Sabha, the minister was also asked the number and details of public sector banks and the extent of the Union government’s current shareholding in each of these banks. The minister stated that the government has stakes in 12 PSBs, and that the holding of a number of shares of the Union government in each of these banks has not declined since 2020. The government’s stake in Punjab & Sind Bank stands highest at 93.85%, followed by UCO Bank at 90.95% and Central Bank of India at 89.27%.

The minister, in another question in the Lok Sabha, was also asked if the Centre proposes to further consolidate public sector banks (PSBs) to enhance their operational efficiency, financial stability and global competitiveness, or whether the government has conducted any assessment regarding the potential impact of the proposed bank mergers on customers, employees and rural banking services. “Presently, no proposal on merger or consolidation of Public Sector Banks (PSBs) is under consideration of the Government,” said Chaudhary.