ED attached assets worth Rs 19,111 cr till March 23 under PMLA: Finance Ministry

The Enforcement Directorate (ED) has attached assets worth Rs 19,111 crore till March 23 under the Prevention of Money Laundering Act (PMLA), 2002, the government informed the Lok Sabha on Monday.
 
This amount translates to 84.61 per cent of the defrauded amount of Rs 22,856 crore in these cases, Minister of State for Finance Bhagwat Karad said. Out of these attached assets, assets worth Rs 15,113 crore, or 66.91 per cent of the defrauded amount, has been restituted to the public sector banks (PSBs). 

Karad said that loan recovery during FY2020-21 as a percentage of the gross non-performing assets (NPAs) as on beginning of the financial year was at 12.28 per cent despite the COVID-19 pandemic and its impact on the economy. He added that banks are required to initiate the legal process in keeping with the RBI’s master circular on 'wilful defaulters', dated May 1, 2015.  

He added that banks can also initiate criminal proceedings against these defaulters if necessary apart from recovery process under mechanisms like filing a suit in civil courts or debt recovery tribunals, action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, filing cases with the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 and through sale of NPAs. 

"Wilful defaulters are not sanctioned any additional facilities by banks, non-banking financial companies (NBFCs) or financial institutions, and their unit is debarred from floating new ventures for five years," Karad said.

He added that wilful defaulters and companies with wilful defaulters as promoters/ directors are barred from accessing capital markets to raise funds, as per the Securities and Exchange Board of India's regulations. The Insolvency and Bankruptcy Code, 2016 has debarred wilful defaulters from participating in the insolvency resolution process. 

The minister also said that the Reserve Bank of India (RBI) has informed that it does not maintain the details of properties attached under the SARFAESI Act, 2002.  However, the central bank has initiated action against 11.25 lakh scheduled commercial banks (SCBs) from FY16 to FY21 under the Act.
 
Karad added that SCBs and all Indian financial institutions report certain financial information of borrowers having aggregate credit exposure of Rs 5 crore and above to the RBI since 2014. 

He further noted that the RBI, however, is prohibited to disclose borrower-wise credit information under Section 45E of the RBI Act, 1934. He explained, “Section 45E provides that credit information submitted by a bank shall be treated as confidential and not to be published or otherwise disclosed.”