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Look-out Circulars against wilful defaulters
Why is it in the news ?
- The government has now allowed CEOs of public sector banks to directly seek issuance of look-out circulars (LOCs) against wilful defaulters.
- The step has taken to prevent the wilful difaulters from fleeing the country.
- A Home ministry notification said CEOs of PSBs have been added to the list of officials who can now make a request for issuance of LOCs to the ministry.
More in the news
- The inclusion by MHA was done following the recommendation of an inter-ministerial panel under Financial Services Secretary Rajiv Kumar.
- The move comes against the backdrop of defaults by Vijay Mallya, Nirav Modi and Mehul Choksi and thereafter, their fleeing the country.
- The Department of Financial Services has issued an advisory to CEOs of all PSBs to act as and when required in a specified manner.
- An official statement said, the move was a continuation of the government’s clean-up drive of the banking sector.
How LOC will work?
- The issuance of LOC by the concerned authority will thwart any move by defaulters to flee the country.
- Previously only the likes of the CBI, Directorate of Revenue Intelligence, RAW, designated officers of Interpol and the ED were empowered to place a request for the issuance of LOC as per the MHA's guidelines.
- Once the MHA receives such a request, it issues the LOC to all immigration check points of airports across the country.
- The guidelines, issued last December, allowed immigration authorities to deny departure to a person seen as "detrimental" to the "economic interests of India".
Source
The Hindu.