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 government banks, on whether any enforcement case is pending against a company before extending them loans.
Once CEIB’s report becomes a requirement, it will pose a challenge for banks to provide loans to companies undergoing investigation by the Enforcement Directorate (ED) or the Central Bureau of Investigation (CBI), or those categorized as Non-Performing Assets (NPAs).
The current ‘antecedent verification report’, currently limited to public sector banks, offers strong risk assessment and mitigation measures, aiding financial institutions in conducting thorough due diligence against fraudulent activities by providing timely insights 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.
At present, government banks must obtain clearance from CEIB before approving significant loans. CEIB conducts a thorough data check on economic offenders before generating reports. These reports serve solely for banks to assess risks and make informed decisions. Ultimately, banks have the discretion to approve or reject loans to entities, even if they are under investigation.
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.
(With TOI inputs)
