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PSU bosses may be exempted from submitting passport info to banks

The government is likely to exempt heads and senior officials of state-run firms from submitting their passport details to banks.

At present, passport details of promoters, directors and authorised signatories in respect of loan accounts of ₹50 crore and above must be furnished with the lenders.

The finance ministry had issued the advisory in 2018 to public sector banks (PSBs) to enable lenders to inform relevant authorities of the passport details if needed.

“We have received representation from both banks and central public sector enterprises (CPSEs) on the matter. This is being looked at as, prima facie, there is a case for providing such exemption,” said a government official.

A senior executive with a state-run firm said top officials of Central Public Sector Enterprises are not a “flight risk”, and these rules were leading to additional paperwork.

“Top executives in state-run firms are selected only after requisite vigilance clearances. So, already their details are available. The additional information is not required in this case unlike private promoters, where passport details may come in handy to stop them from fleeing abroad,” the person added.

In 2018, the government advised all public sector banks to obtain a certified copy of the passport of the promoters/directors and other authorised signatories of companies availing of loan facilities of ₹50 crore or more.

In cases where the concerned person does not have a passport, a certificate in the form of declaration that the person does not possess a passport should suffice in lieu of passport details, according to the directive. Later that year, the home ministry included chairman, chief executive officers and managing directors of public sector banks in the list of individuals who can seek issuance of look-out circulars against offenders to prevent their escape from the country.

The directive is already facing scrutiny from the courts.

In December, the Bombay High Court ruled that look-out circulars issued against individuals at the instance of public sector banks shall not restrain them from traveling abroad temporarily.

Under the existing guidelines from the Central Vigilance Commission (CVC), all cases of fraud wherein involvement of officials of a CPSE is evident shall be referred to the Anti-Corruption Branch of CBI. In cases where involvement of officials is not evident, they shall be referred to the Economic Offences Wing of the central agency.

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