Once the Bill becomes law, it will empower investigating agencies to confiscate unpledged properties of the absconding offenders. "Even benami assets, if any, would be seized".
In September, the Union Law ministry had approved the finance ministry's draft of Fugitive Economic Offenders Bill, 2017, and its passage into law is now being expedited as part of the Modi government's response to the PNB scam.
It will target big defaulters, Jaitley said.
It provides for an application being made before a special court for a declaration that an individual is a fugitive economic offender, attach and confiscate his properties in India and overseas, including benami property, and disposing them off to recover dues.
The proposed law has been brought to fall heavily on economic offenders like Lalit Modi, Vijay Mallya, Nirav Modi who fled the country after defaulting on loans amounting in crores.
According the bill, economic offenders will be treated as criminals.
The Cabinet also cleared the establishment of National Financial Reporting Authority (NFRA) after reports of various auditing lapses in the banking sector resulting in a series of fraudulent transactions. "The absence of such offenders from Indian courts has several deleterious consequences - first, it hampers investigation in criminal cases; second, it wastes precious time of courts of law, third, it undermines the rule of law in India", the statement said.
The proposed law aims to bring to book offenders who have failed to pay back huge bank loans, and refused to return to the country to face legal action.
While explaining why confiscation of assets has been provided for, Jaitley said, "A trial of fugitive will never be complete". Such a person will also be barred from pursuing any "civil claims" in the country - officials said this move would discourage such persons from defrauding banks and leaving the country. The Bill will confiscate assets of fugitive, who left the country after committing economic offences. "The cabinet has now approved it". "The central government can also refer such other entities for investigation where public interest would be involved", the government said in a separate statement.