ED attaches assets worth ₹19,111 crore of loan fugitives

The Enforcement Directorate (ED) has attached assets worth ₹19,111 crore belonging to bank loan fugitives who have fled from the country after defrauding banks in multi-crore loan scams. Out of the recovered amount, ₹15,000 crore has been restituted to the public sector banks (PSBs), as per the Ministry of Finance.

“As per the inputs received from the Enforcement Directorate (ED), it has attached assets worth ₹19,111 crore, up to March 23, 2022, under the provisions of Prevention of Money Laundering Act, 2002 in certain cases of loan fugitives, which is 84.61% of the defrauded amount of ₹22,586 crore in these cases,” the finance ministry today said in a reply to a question in the Lok Sabha on recovery from willful defaulters.

“Further, out of these attached assets, assets worth ₹15,113 crore, which is 66.91% of the defrauded amount, has been restituted to PSBs,” the ministry said in the reply.

The key names that feature in the list of businessmen who defrauded the Indian banking system and fled the country include diamantaire Nirav Modi, who is alleged to have duped Punjab National Bank in a ₹28,000 crore fraud, and is believed to have left the country in January 2018. Currently lodged in Wandsworth prison in London, Modi is contesting his extradition to India in the U.K. courts.

Similarly, Modi’s uncle Mehul Choksi too is another fugitive businessman wanted in the PNB matter. The poster boy of the fugitive defaulter saga of course is Vijay Mallya, who is alleged to have round tripped the ₹9,000 cr loan from State Bank of India to Kingfisher Airline, and fled India in March 2016. As per ED, there are as many as 36 Indian businesspersons who have fled the country despite criminal cases against them.

On the slow recovery of non-performing assets (NPAs) by the banks the ministry said in the reply, “As per Reserve Bank of India (RBI) data, recovery made by public sector banks (PSBs) during the financial year as a percentage of gross non-performing assets (NPAs) as on beginning of the financial year (FY) has improved from 11.33% in FY2017-18, to 13.52% in FY2018-19, to 14.69% in FY2019-20.”

“In FY2020-21, despite widespread impact of the Covid-19 pandemic on the economy and its cascading effect on the actions in respect of recovery measures, the recovery during the financial year as a percentage of gross NPA as on beginning of the financial year was still at 12.28%,” finance ministry added.