Fugitive Economic Offenders (FEO)

04.12.2025

Fugitive Economic Offenders (FEO)

Context:

In December 2025, the Union Finance Ministry informed the Lok Sabha that nine declared Fugitive Economic Offenders (FEOs) collectively owe over ₹58,000 crore to public sector banks. While recovery efforts have retrieved approximately ₹19,000 crore, the data highlights the scale of financial burden on state-owned lenders.

About Fugitive Economic Offenders (FEO):

What it is?

A legal designation under the Fugitive Economic Offenders Act, 2018, aimed at deterring individuals from fleeing India to evade the legal process for economic crimes. Criteria for Declaration:

• Warrant: An arrest warrant must have been issued by a special court for a Scheduled Offence.
• Value Threshold: The total value of the offence must be at least ₹100 crore.
• Fugitive Status: The individual has either left India to avoid criminal prosecution or, being abroad, refuses to return to face the law. Key Provisions of the Act:
• Declaration Process: The application is filed by the Director (Enforcement Directorate) in a Special Court designated under the Prevention of Money Laundering Act (PMLA), 2002.
• Asset Confiscation: Unlike previous laws, this Act allows for the confiscation of all properties belonging to the offender (including benami properties and foreign assets), regardless of whether they are "proceeds of crime."
• Civil Disentitlement: Any court or tribunal in India may bar the declared FEO from filing or defending any civil claim, effectively closing legal avenues for them to protect their assets remotely.

Enforcement Mechanism:

• Nodal Agency: The Enforcement Directorate (ED), a specialized financial investigation agency under the Department of Revenue, is responsible for implementing the Act.
• Powers: The ED conducts investigations, attaches properties, and files applications for the "Fugitive" declaration in the Special Court.

Implications:

• Asset Recovery: The Act empowers the government to confiscate and sell assets to recover debts, offering relief to public sector banks (PSBs) burdened by Non-Performing Assets (NPAs).
• Deterrence: The threat of losing all assets—not just those linked to the crime—serves as a strong deterrent against high-net-worth individuals fleeing the country.
• Legal Efficiency: By disentitling offenders from defending civil suits, the Act speeds up the recovery process which was previously stalled by prolonged litigation.

Conclusion:

The FEO Act, 2018, represents a paradigm shift in India’s approach to economic crimes, moving from simple prosecution to aggressive asset recovery. With nearly 33% of the outstanding dues from top offenders already recovered, the law serves as a critical tool for restoring the financial health of India’s banking sector.