New Delhi: In the wake of Vijay Mallya fleeing from the country after being declared a ‘wilful defaulter’ by SBI-led consortium of 17 banks, the Central Vigilance Commission (CVC) has asked the public sectors banks to review their protocols for faster identification of stressed loans.
It has also asked the banks to draw up a second layer of verification of valuation reports and such documents submitted by a potential borrower.
"We have advised banks to conduct second verification of valuation reports and legal opinions submitted by borrowers which are usually relied upon by banks while sanctioning loans. This task can also be outsourced to another agency. Alternatively, banks can set up their own consultancy divisions. What I want to say is there's no point running after bank managers once an account has turned into a non-performing asset," CVC KV Chowdary told Economic Times.
Besides, it has asked the banks to formulate guidelines on when they can start selling liquid assets of a borrower in case if there are indications that a loan is moving into the 'stressed' category.
"At present there are no guidelines by banks at what stage they can encash liquid assets. We feel they must have a clear policy on this," Chowdary said.
Mallya left for the Britian on March 2, triggering action by CBI and Enforcement Department. Yesterday, after revoking his passport last week, the Government of India approached the British government through MEA seeking liquor baron’s extradition.
Mallya, who appears to be unfazed by the developments, has said that he has no plans to leave the UK, where he says he is in “forced exile”.
Earlier this week, the Supreme Court directed that details of Mallya, his estranged wife, and children's overseas assets be given to the banks, seeking the recovery of the over Rs 9,000 crore loaned to his now-grounded Kingfisher Airlines.
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