84.61% of total defrauded funds attached/seized under PMLA and Fugitive Economic Offenders Act

Consortium of banks realizes ₹ 7,975.27 crore by sale of assets

Prevention of Money Laundering Act, 2002 (PMLA) and Fugitive Economic Offenders Act, 2018 (FEOA) provide that the Special Court trying the offence may restore any property/assets involved in money laundering to a third party claimant with legitimate interest, including banks. This was stated by Union Minister of State for Finance Shri Pankaj Chaudhary in a written reply to a question in Rajya Sabha today.

The Minister stated that in the cases pertaining to Vijay Mallya, Nirav Modi and Mehul Choksi who have defrauded Public Sector banks by siphoning off the funds through their companies which resulted in total loss of ₹ 22,585.83 crore to the public sector banks.

Giving more details, the Minister stated that as on 15.03.2022, assets worth ₹ 19,111.20 crore have been attached under the provisions of PMLA. Out of which, assets worth ₹ 15,113.91 crores has been restituted to the Public Sector Banks. In addition, assets worth ₹ 335.06 crore have been confiscated to Government of India.

The Minister further stated that as on 15.03.2022, 84.61% of the total defrauded funds in these cases have been attached/seized and 66.91% of total loss to the banks has been handed over to Banks/Confiscated to Government of India. It is pertinent to mention here that as on 15.03.2022, the consortium of banks led by SBI has realized ₹ 7,975.27 crore by sale of assets handed over to them by the Directorate of Enforcement, the Minister added.

Property restoration under PMLA and FEOA enables return of laundered assets to legitimate claimants, increasing bank recoveries. The Prevention of Money Laundering Act and the Fugitive Economic Offenders Act permit Special Courts to restore property/assets involved in money laundering to third party claimants with legitimate interest, including banks; these provisions enable attachment of assets, confiscation to the Government, and restitution to public sector banks. In the cited fraud matters, a large proportion of the alleged defrauded funds had been attached as of 15.03.2022, a substantial share of attached assets was restituted to banks, some assets were confiscated to the Government, and banks realized further recoveries by sale of assets handed over by enforcement authorities.