Banks collecting passport details of those borrowing over Rs 50-cr a possible precursor to change in passport rules

The Finance Ministry’s mandate asking banks to collect passport details of those who have borrowed in excess of Rs 50 crore within 45 days and to do so for all future loans of this order has raised several curious questions. First, what about corporate borrowers who have been in the eye of storm in the recent past though the individuals behind incorporation are there for everyone to see? To wit, fugitive liquor baron Vijay Mallya of Kingfisher and Mehul Choksi of Gitanjali Gems. But the Finance Ministry would do well to spell out clearly if the passport details of all the directors of a borrowing company must be obtained or only those of the working directors i.e. fulltime directors. Secondly, the accent should have been on the outstanding including accrued interest rather than on the loan amount. Again shouldn’t the accent have been on the total outstanding from the banking system rather than from a single bank? [caption id=“attachment_4308711” align=“alignleft” width=“380”] Representational image. AFP[/caption] Borrowers especially with evil intents deliberately take loans from several banks so that the size of the total outstanding from them doesn’t come into prominent relief in the absence of CIBIL like dispensation for corporates under which it would be possible to zero in on the aggregated data at any given point of time relating to one’s borrowings. At present we have to make do with the disaggregated data in individual bank’s possession. Be that as it may. What would the banks do with such passport information? Well the Finance Ministry has been rather cryptic in this regard which has been fuelling all sorts of speculation. As it is, section 10 of the Passport Act empowers passport authorities in India to revoke one’s passport under the following circumstances: • In the interest of the sovereignty and integrity of India • Security of India • Friendly relations with any foreign country • In the interest of the general public. On 21 July 2017, the Delhi High Court came down heavily on the passport authorities for relying on a bald complaint from a Saudi national against an Indian national Sikhandar Khan for revoking his passport. The passport of Sikandar Khan, a father of three who has been working as a marketing specialist in Riyadh since 2006, was suspended in September, 2016, when he was visiting India on the basis of information that he was involved in cheating Indian nationals in Saudi Arabia. However, the show cause notice served upon him was bereft of any particulars. Due to suspension of his passport, he could not travel back and join work overseas. Observing that the power to revoke or suspend passport under Section 10 (public interest) of the Passport Act is a serious restriction on the fundamental rights of an individual, the Delhi High Court had directed that the passport of an Indian national Sikhandar Khan to be returned. Now it is entirely possible that the government is clearing the decks for amending the Passport Act to include banking fraudsters in the above narrow list to ensure that revocation of their passports does not run into legal heavy weather. Indeed it is time the government specifically targeted economic offenders under section 10 of the Passport Act not only to stop them from fleeing the country but also to avoid blushes. Economic offences like wilful default may make the grade under the first clause – sovereignty and integrity of India but the government would do well to be explicit when it comes to infringement of one’s fundamental rights where courts normally tend to take a very strict view otherwise. One can therefore expect an amendment to the Passport Act to take forward the government’s resolve in stopping the wannabe fugitives in their tracks. (The write is a senior columnist. He tweets at @smurlidharan)