We all, as kids, have read stories of thieves, robbers and dacoits who used to loot people and run away. There were stories of some notorious thieves also who used run away to some different city or place where no one could trace them. Have you ever wondered and felt that these were just stories and can never become a reality? Then, you all were wrong. We do have such similar thieves even in this modern world. No doubt as modern times bring modern changes, even these people are different. Basically, they are rich businessmen who take huge loans from banks or carry out big scams in the country and run away to different countries. They even have a modern name. They are known as Fugitive Economic Offenders.

Who is a Fugitive Economic Offender?

According to the Fugitive Economic Offenders Act, 2018, any individual against whom a warrant for arrest in relation to a scheduled offence has been issued by any Court in India, who

• Has left India so as to avoid criminal prosecution, or
• Being abroad refuses to return to India to face criminal prosecution.

The Fugitive Economic Offender Act, 2018, was a bill passed under the Prevention of Money Laundering Act, 2002. The assets of the offenders whose offences measure over Rupees 100 crores are directly confiscated.

These offenders are generally affluent businessmen. They have two or more well to do business sets. In order to expand these businesses, they take loans from different banks. As these people are rich and influential, even loans get granted quickly to them. After using the whole loan amount, they find it difficult to repay it. So in order to save themselves, they run away to different countries. The money they flee with is the hard-earned money of the poor public of India. Doesn’t this match with the ancient thieves who looted poor people in a similar way?

But the fugitive economic offenders’ act will help the banks to recover the money from the offenders as their properties in India will be confiscated and they will be forced to return to India as face the legal proceedings. There is another crime which is rising. The NPA (Non Performing of Assets) is rising in India.

What is a Non-Performing Asset?

A Non Performing Asset is a loan or advance for which the principal or interest payment remains overdue for a period of 90 days. The banks need to further classify the NPA into 3 types:

• Standard Asset
  It is the loan in which payment is due for 90 days to 12 months

• Doubtful Asset
  It is the loan in which payment is due for more than 12 months but less than 18 months.

• Lost Asset
  This is the loan in which payment is due for more than 36 months plus 90 initial days.

Reasons of rising NPA

• The businessmen who are not ready to pay the debts
  The rich businessmen who take loans of such huge amount have the capacity to pay the loan but they are not ready to pay the loan. If we calculate the value of their total assets in India and abroad, the value turns out to be way higher and they could easily repay the loan but they are just not ready to do so. Instead, they choose to run away from the country and live abroad peacefully.

• No strict bank rules
  Most of these loans are granted on the basis of the influence and name of these business tycoons. On one hand, when a middle-class person applies for a loan to any bank, they check so many documents and financial statement of the person before they grant loan but on the other, loans are granted to these people without even verifying their basic business condition. They don’t even check the financial statements of these people.

• Corruption
  The bank managers and CEOs of private banks break the RBI guidelines and grant such huge amount of loans to businessmen who don’t even repay the loan in future. In order to get a small amount of bribe, these managers and CEOs risk the hard-earned money of poor people who have trusted their banks and them.

Solution to the problem of rising NPA

• Strict laws
  The law needs to be more strict. No doubt the Fugitive economic Offenders Act is really strict as it confiscates their property. This will indulge a fear among the defaulters about the repayment of loans.

• Strict RBI guidelines
  The RBI needs to be more strict and take some strict action against the banks who are granting such huge amount of loans to people without any basic verification.

• Equal rules for all
  The bank rules for granting loan needs to be equal for all. The rich people who are actually the defaulters are granted loan easily while the poor who repay the loan are harassed to grant the loan. This needs to be ended. Rich or poor, the rule should be the same for all.

• Change of CEOs and managers
  The private banks should make such policies under which the CEOs and manager should be changed timely. This will not allow them to misuse their power and grant loan easily to anyone without any verification.

Laws passed by the Government in the last decades to combat the problem of NPA

• The Recovery of Debts due to Banks and Financial Institutions Act, 1993.
• Securitization and Reconstruction of financial assets and Enforcement of Security Interest Act, 2002 (SARFAESI)
• Prevention of Money Laundering Act, 2002
• Fugitive Economic Offenders Act, 2018

Conclusion

The problem of rising NPA and Fugitive Economic offenders add a hindrance to the growth and development of the nation. The rich take loans for enjoyment and at the time of repayment of the loan, run away abroad in order to save themselves. This is a serious crime and should be dealt in a similar way. The advanced technology should be used to reduce the rising NPA. This is a heinous crime and is treated in that way. Because running away without repaying the loan is not the solution to the problem. if you can’t repay the loan than should not apply for one. Even the bank authorities should take that into consideration.