NEW DELHI: The Union Cabinet today approved the Fugitive Economic Offenders Bill to deal with those who escape overseas after committing financial malpractices.

The bill seeks to deter economic offenders from evading the process of Indian law by giving powers to the government to confiscate property of absconding corporate defaulters.

"Fugitive Economic Offenders Bill 2018 has been brought to confiscation of assets of a fugitive, including Benami assets. There will also be a provision to confiscate those assets outside India but co-operation of that country will be needed," finance minister Arun Jaitley said at a press briefing today.

The Union Law ministry had approved the bill in September last year and it was tabled in the winter session of Parliament. The bill flows from finance minister Arun Jaitley's 2017-18 Budget speech promising legislative changes or even a new law to seize the assets of fugitives.

The bill defines a fugitive economic offender as a person who has an arrest warrant issued in respect of a scheduled offence and who leaves or has left India so as to avoid criminal prosecution, or refuses to return to India to face criminal prosecution.

The bill covers a wide range of offences, including wilful loan defaults, cheating and forgery and non-repayment of deposits. New and old cases of persons who have fled the country to avoid prosecution will come under its ambit.

Cabinet has also approved establishment of National Financial Reporting Authority (NAFRA), Jaitley added.

"NAFRA will act as an independent regulator for the the auditing profession which was one of the key changes brought in by the Companies Act, 2013. Jurisdiction of NAFRA for investigation of chartered accountants and their firms under Section 132 of the Act would extend to listed companies and large unlisted public companies, the thresholds for which shall be provided in the Rules," he elaborated.

In the wake of economic offenders like Nirav Modi , Mehul Choksi and Vijay Mallya fleeing the country, the Cabinet was discussing the contours of a new law to confiscate assets of those who get away with unpaid liabilities of over Rs 100 crore, along with a revamp of the regulatory regime for chartered accountants.

The expeditious passage of the proposed bill into law may be seen as the Modi government's promise to crack down on financial frauds, like the Punjab National Bank scam. The prime accused in the PNB case, diamantaire Nirav Modi and his uncle Mehul Choksi, escaped the country last month after fraudulently obtaining loans amounting to Rs 12,622 crore.

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In Video: Govt approves Fugitive Economic Offenders Bill to crack down on financial frauds