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Friday, February 26, 2021

Cites Rs 2,800 crore loan default: Karnataka HC upholds travel curbs on UAE businessman

The Bank of Baroda and the Punjab National Bank had issued Lookout Circulars dated May 8, 2020 and July 18, 2020 to prevent Shetty from leaving India.

By: Express News Service | Bengaluru |
Updated: February 17, 2021 8:25:15 am
Shetty, who founded the firm NMC Health in the UAE with interests in the pharmaceutical, hospitality, healthcare and foreign exchange businesses, is facing over 34 cases in the Emirates over bank loan repayments caused by a huge debt burden in his businesses.

The Karnataka High Court has upheld travel restrictions imposed on Indian-origin UAE businessman B R Shetty, who was denied permission to board his flight from India to Abu Dhabi in November last year, saying that the amount he owes Indian public sector banks “is more than one third of the annual budget of a state like Sikkim”.

Shetty, who founded the firm NMC Health in the UAE with interests in the pharmaceutical, hospitality, healthcare and foreign exchange businesses, is facing over 34 cases in the Emirates over bank loan repayments caused by a huge debt burden in his businesses.

The Bank of Baroda and the Punjab National Bank had issued Lookout Circulars dated May 8, 2020 and July 18, 2020 to prevent Shetty from leaving India.

While rejecting Shetty’s plea to lift the travel restrictions, Justice P S Dinesh Kumar said “it is relevant to note that petitioner is liable for repayment of about Rs 2,800 crore lent by public sector banks.”

“This court cannot lose sight of the fact that money belonging to this country has been utilized by the petitioner in a foreign country to run his businesses. No material is produced to show that money lent by Bank Of Baroda and Punjab National Bank has resulted in any development of this country. On the other hand, as on date, it has become a bad debt and public sector banks are fighting litigation in India as also in UAE to recover the same.”

The court further noted, “If public sector banks are permitting such large exposure without adequate securities, it is a matter of great concern and it shall have serious adverse impact on the economy. It is time lawmakers and Reserve Bank of India re-visit lending guidelines and procedures and take necessary remedial measures to ensure that public money is well secured before disbursement.”

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