Digital Communication Between Banks and CEIB Approved for Loan Defaults
The government has approved a new digital reporting and communication system to address loan defaults exceeding Rs 50 crore. Instead of relying on paper-based communication, the Union government has introduced a digital mechanism. Under this system, the Central Economic Intelligence Bureau (CEIB) will send digital reports to public sector banks within 15 days of a loan request at the pre-approval stage.
Digital Communication Between Banks and CEIB Approved: Key Points
- These reports will provide information about borrowers seeking loans of Rs 50 crore or more and their default status.
- Currently, it is mandatory for government-owned banks to obtain a report from CEIB regarding loan applicants with amounts exceeding Rs 50 crore and any outstanding defaults before processing their loans.
- The Union finance minister approved the new system after consulting all the relevant parties involved.
- The government has implemented a digital system to streamline communication between banks and the Central Economic Intelligence Bureau (CEIB).
- Under the new system, banks are required to submit their requests to CEIB through dedicated emails using a specific format.
- In return, CEIB will exclusively send reports to banks via email, maintaining a record of the timeline and actions taken by the banks.
- According to reports, the number of requests made by banks to CEIB regarding borrowers increased significantly during the fiscal year 2022-23, with around 6,000 requests compared to 1,300 in the previous year.
With the new digital mechanism in place, it is expected that these numbers will continue to rise. This system will make the process smoother and faster for banks, as they can now simply submit a request to CEIB online and receive final reports within 15 days.
Also Read: Indian Bank Joins ICCL as Clearing and Settlement Bank
Find More News Related to Banking