Centre has cleared a prompt digital reporting and communication mechanism to plug defaults on loans of over Rs 50 crore. According to reports, the Union government while ending the paper-based communication system has now put in place a digital mechanism under which the Central Economic Intelligence Bureau (CEIB) will send a report digitally regarding borrowers to the PSU banks for a loan amount of Rs 50 crore or higher at pre-approval stage within 15 days of request.
At present it is mandatory for all the government holding banks to furnish a report from CEIB regarding the loan seekers of Rs 50 crore or more and those who have a pending default, before processing any loans.
The new system was cleared by the Union finance minister in due consultation with all the stakeholders. Under the new system the government has introduced a digital system to streamline the process of communication between banks and the Central Economic Intelligence Bureau (CEIB).
The new system will require banks to submit their requests to CEIB through dedicated emails in a specific format. In turn, CEIB will exclusively send reports to banks via email, maintaining a record of the timeline and actions taken by the banks.
With the Centre already tightening compliance noose around loan defaulters, reports suggest that during FY 2022-23 as many as 6,000 requests regarding borrowers were sought by the banks from CEIB as against 1,300 in the previous year. With the new digital mechanism in place now such numbers are likely to swell further as this will make the process more smooth and faster with banks just having to place a request with CEIB online and getting final reports within 15 days.