Lok Sabha Question No. 312 (STARRED), answered on 2018-03-16
Subject: Fraudulent Activities
Ministry: FINANCE
Asked by: (ADV.) JOICE GEORGE

## GOVERNMENT  OF INDIA MINISTRY  OF FINANCE DEPARTMENT  OF FINANCIAL  SERVICES

## LOK SABHA

## STARRED QUESTION NO. *312

TO BE ANSWERED  ON THE 16 TH  MARCH  2018/ PHALGUNA 25, 1939 (SAKA)

## Fraudulent  Activities

## *312.   ADV.  JOICE GEORGE:

Will  the Minister  of FINANCE  be pleased to state:

- (a) whether  many  more  fraudulent  activities  like  the Punjab  National  Bank Scam unearthed  recently,  have also taken  place in the country;
- (b) if so, the details  thereof  and the reaction of  the Government  thereto;
- (c) whether   the  Government   has  taken   cognizance   that   the  people   who   have gained  crores of  rupees  through   scams  in  banking   sector  are  still   roaming   freely without  any  legal  issues and those who  have taken  agricultural loans/other  loans are facing recovery  and other  legal  issues; and
- (d) if so, the details  thereof  and the reasons  therefor?

## ANSWER

THE FINANCE  MINISTER (SHRI ARUN  JAITLEY)

- (a) to (d):  A Statement  is laid  on the Table  of the House.

## STATEMENT FOR LOK SABHA  STARRED QUESTION NO.*312  FOR 16 TH MARCH 2018 REGARDING  'FRAUDULENT ACTIVITIES' BY ADV.  JOICE GEORGE, MEMBER OF PARLIAMENT.

(a)  to  (d):  RBI  monitors   frauds  reported   by   commercial   banks,   in  terms   of  Master Direction  on 'Frauds - Classification and reporting'.  As per RBI inputs,  no fraud similar in line  as the recently  reported  PNB fraud has been reported  by  any  bank  during  the last one year.

In  addition,   to  deter   economic   offenders  from   evading   the  process  of  Indian   law   by remaining   outside   the  jurisdiction of  Indian   courts, Government   has  introduced   the Fugitive  Economic  Offenders  Bill,  2018 in Parliament. In this connection,  Government has also advised PSBs to obtain a certified copy of the passport of the promoters/directors and other  authorised  signatories  of companies  availing  loan  facilities of more than  Rs. 50 crore.

A number  of steps have been taken  to deal with  defaulters.RBI  has issued instructions which  provide  that  wilful  defaulters  are not to be sanctioned  any  additional  facilities  by banks or financial  institutions, that  their  unit  is debarred  from  floating  new  ventures  for five  years,   and  that   lenders   may   initiate   criminal   proceedings   against   them,   wherever necessary.  As per data reported  by  Public  Sector  Banks,  as on 31.1.2018,  2,170 FIRs have been registered   against   wilful   defaulters,   8,513  suits  have  been  filed  for  recovery   from them,   and  action   has  been  initiated   under the  Securitisation   and  Reconstruction of Financial  Assets and Enforcement  of Security  Interest Act,  2002 in respect of 7,005 cases of  wilful   defaulters.   Further,   Government   has  asked  PSBs  to  examine   all  accounts exceeding  Rs. 50 crore,  if classified  as Non-Performing Asset (NPA),  from the angle of possible   fraud.   SEBI  has  amended   its  regulations,   debarring   wilful   defaulters   and companies  with  wilful  defaulters  as promoters/directors from accessing capital markets to raise funds. The Insolvency  and Bankruptcy Code has been amended  to debar wilful defaulters  from  participating in the insolvency  resolution  process.