Business
Now, private banks must seek CEIB clearance for high-value loans – Times of India
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NEW DELHI: Central Economic Intelligence Bureau has written to the department of financial services, finance ministry, to ensure all private banks seek mandatory clearance from CEIB, as in the case of govt banks, on whether any enforcement case is pending against a company before extending them loans.
Once CEIB’s report is made a prerequisite, it will be difficult for banks to extend loans to firms facing ED/CBI investigation or classified as NPAs.
The ‘antecedent verification report’, which at present is applicable to only public sector banks, provides robust safeguards in risk assessment and mitigation and helps financial institutions carry out due diligence against any fraudulent activity with timely inputs from CEIB.
In financial year 2022-23, more than 6,000 antecedent reports were generated by CEIB for banks seeking clearance before sanctioning high-value loans. These requests amounted to a total loan of over Rs 39 lakh crore. InFY 2021-22, there were 1,300 such applications for loans totalling Rs 4.5 lakh crore.
Currently, govt banks cannot sanction high-value loans without taking clearance from CEIB, which performs a data check of economic offenders before generating any such report. These antecedent reports are only for the purpose of risk assessment by banks and for them to take an informed decision. It is up to the bank concerned to sanction or deny loans to an entity even if the latter has pending investigation against it.
Entities which are classified as NPAs or against which fraud or money laundering investigations are pending are under surveillance. These reports are prepared based on a rich economic offenses database maintained by the bureau, sources said.
CEIB collates offence data from over 18 enforcement agencies, which are already uploading case data and FIR details through an online application on a real time basis in the economic offence database which will soon be relaunched as the National Economic Offence Record.
In another proposed action, CEIB is considering issuing a unique code for each individual or a company accused of economic offences. The identification number will be called ‘Unique Economic Offender Code’ and will be linked with his/her Aadhaar number, in case of an individual, or PAN in case of a company.
Once CEIB’s report is made a prerequisite, it will be difficult for banks to extend loans to firms facing ED/CBI investigation or classified as NPAs.
The ‘antecedent verification report’, which at present is applicable to only public sector banks, provides robust safeguards in risk assessment and mitigation and helps financial institutions carry out due diligence against any fraudulent activity with timely inputs from CEIB.
In financial year 2022-23, more than 6,000 antecedent reports were generated by CEIB for banks seeking clearance before sanctioning high-value loans. These requests amounted to a total loan of over Rs 39 lakh crore. InFY 2021-22, there were 1,300 such applications for loans totalling Rs 4.5 lakh crore.
Currently, govt banks cannot sanction high-value loans without taking clearance from CEIB, which performs a data check of economic offenders before generating any such report. These antecedent reports are only for the purpose of risk assessment by banks and for them to take an informed decision. It is up to the bank concerned to sanction or deny loans to an entity even if the latter has pending investigation against it.
Entities which are classified as NPAs or against which fraud or money laundering investigations are pending are under surveillance. These reports are prepared based on a rich economic offenses database maintained by the bureau, sources said.
CEIB collates offence data from over 18 enforcement agencies, which are already uploading case data and FIR details through an online application on a real time basis in the economic offence database which will soon be relaunched as the National Economic Offence Record.
In another proposed action, CEIB is considering issuing a unique code for each individual or a company accused of economic offences. The identification number will be called ‘Unique Economic Offender Code’ and will be linked with his/her Aadhaar number, in case of an individual, or PAN in case of a company.
