PNB to hire detectives to track absconding defaulters

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PNB to hire detectives to track absconding defaulters

The reward for tracking property of the defaulter with evidence can go up to Rs 1.5 lakh. Failure to track a defaulter or his property will reduce the fee to a low of Rs 3000 to Rs 7,000.

With its NPAs mounting, defaulters disappearing and government probe agencies failing to track down absconding fraudsters like Nirav Modi, beleaguered Punjab National Bank has decided to hire its own set of Sherlock Holmes.

The Punjab national bank has floated advertisement that it wants to hire detectives to track down vanishing defaulters and their hidden assets.

Latest CIBIL data shows that by the end of last year, the bank is buried under Rs 12,574 crore worth wilful defaults by 1,018 borrowers. In February, came the Nirav Modi heist worth Rs 13,000 crore.

PNB is not the first Indian bank to use the services of detectives and agencies.

Nationalised banks like syndicate bank, corporation bank and Indian bank in the past have resorted to this measures to track down defaulters, evaders and their assets.

The other reason why the bank wants detectives is that after defaulting, borrowers simply just vanish. By the time the bank realises the fraud, the defaulters manage to divert their assets to other businesses without the knowledge of the lending bank.

The bank's advertisement says that by using the services of detectives, PNB "aims to significantly supplement efforts of the field officials in recovering bank's dues in NPA accounts."

"Their job will include locating the borrower, co-borrower, guarantor and mortgagors, in and outside India, including their legal heirs who are either untraceable or not available at the addresses given in the bank's records. They will have to ascertain latest information about their present addresses, occupation, businesses, income streams, details of their all assets, whether charged or uncharged, their location (whether in India or abroad) and value and ownership," it further says.

Once the detectives start working for the bank, they would be expected to "Give details of bank accounts maintained by the defaulting borrower(s)/guarantor(s), including their legal heirs. Give details of credit facilities availed/to be availed by defaulting borrower(s)/ guarantor(s) from other Banks."

They would be expected to also "Confirm present state of ownership of the secured assets by personal visit(s)/market report, duly confirmed by the documents. Gather any other information which the bank cannot access by utilizing normal channels like CIBIL/internet/local enquiries and which may be considered necessary by the bank for recovery of the bank's dues."

The eligibility criteria for allocation of accounts to detective agencies have been underlined in the advertisement.

All NPA accounts under any category i.e Sub-Standard, Doubtful and Loss category (whether non-suit filed, suit filed or decreed) shall be covered by the policy in which engagement of detective agency is deemed appropriate, as per the requirement.

The bank has announced the eligibility criteria for detective agencies. Only agencies (partnership firms, companies, corporations etc.) with sufficient means/ resources/ field experience will be considered for engagement. Interestingly, at present, banks don't have regulatory and statutory guidelines for detective agencies. PNB has stipulated that the agencies which apply for empanelment must be a member of "Association of Private Detectives & Investigators" of India (APDI).

The bank has fixed a bounty fee for each successful tracking of a defaulter.

Each time the empanelled detectives agency tracks an absconding defaulter/guarantor/company director and submits documentary or other proof, it may get a fee ranging between Rs 7,000 to a maximum of Rs 30,000.

The reward for tracking property of the defaulter with evidence can go up to Rs 1.5 lakh. Failure to track a defaulter or his property will reduce the fee to a low of Rs 3000 to Rs 7,000.