By Gulf Bank

Copyright thehindu

The police personnel at Velloor police station in Kottayam had a surprise visitor on September 15 this year. Mohammed Bader Al Qattan, Chief Consumer Officer of the Al Ahli Bank of Kuwait K.S.C.P, Safat, Kuwait, accompanied by a colleague and a Kochi-based lawyer, walked into the station with a set of complaints. He laid the files on the table and started explaining his grievances to the personnel.

Qattan wanted the help of the police to bring to book a native of Velloor, who allegedly duped the bank of ₹63 lakh and left the country for good without clearing the loans.

After formally lodging the complaint, he left for the local police stations in Kottayam and Ernakulam districts, the native places of other loan defaulters.

The list of loan defaulters that he was carrying had the names and other details of 13 nurses employed in various hospitals in Kuwait. The bank complained that they wilfully defaulted the loans and thus defrauded it of around ₹10 crore.

The bank’s case is that it lost around ₹270 crore from the loans it disbursed to 806 Indians over the years and Keralites accounted for 90% of the defaulters.

As he was leaving the police station, an officer asked, “Is it so easy to avail loans of such huge amounts in Kuwait? Maybe I should also think of moving out there.” A wry smile flashed across the face of Qattan. The police officer, attest the team members, was right in asking the liberal approach of the Kuwait bank in providing loans.

However, it is not the case any more. After being defrauded of huge amounts, banks in Kuwait have tightened the procedures and guarantee conditions for loans. Moreover, banks have started sending its officers in search of defaulters to their hometowns and pursuing legal cases for recovering money.

Gulf Bank case

The Kuwaiti banker’s Kerala visit was, in fact, a rerun of what happened in November 2024, when two representatives of Gulf Bank K.S.C.P., another leading bank in Kuwait, travelled to the State and filed similar complaints against 10 Keralites. The bank’s case is that 569 people, mostly Keralites, wilfully defaulted on repaying loans and cheated it of ₹341 crore. The State Crime Branch is investigating the complaints.

Bank officials say a pattern is discernible in the financial behaviour of the loan defaulters. The loanees wilfully resign their employment and leave the country without notifying anyone or repaying their loans.

“The banks in Kuwait usually offer loans to expatriates on production of their civil ID and salary certificates,” says Thomas Anakkallunkal, the lawyer representing the two banks in India.

The banks deduct the EMI of the loan directly from the salary of the loanee. During 2020-21, a number of nurses employed in Kuwait left for European countries and Australia without informing the banks. They apparently used the funds raised in the form of loans to meet their expenses for migration, says Thomas.

“A few of the employees raised huge amounts as loans after their migration plans were finalised. Later, they left the country without repaying the amounts. The banks became aware of the fraud after the repayment of the loans was defaulted and the salary was not credited to the accounts of the loanees,” says the lawyer.

Though some of the defaulters of Gulf Bank cited COVID-19-induced financial crunch, travel restrictions, and the resultant job loss as the reasons for defaulting repayment, Thomas refuses to buy the arguments.

“Most of the loanees were working in the public health-care sector, and there was no question of them losing jobs during the pandemic outbreak. Hence, such arguments do not hold water,” he says.

Interestingly, one of the defaulters of Gulf Bank agreed to settle his dues, apparently after learning about the legal proceedings initiated against him. The man, who reportedly owed the bank ₹63 lakh, fully repaid the loan in December 2024, one month after the bank authorities filed a complaint against him with the Oonnukal police in Ernakulam. Later, he moved the Kerala High Court seeking to quash the FIR naming him, according to sources.

The banks, even while preferring complaints in police stations, have simultaneously initiated mediation talks with the loan defaulters to recover money.

Defaulters’ defence

The mother of one of the alleged defaulters, who lives in Kottayam, sounded perturbed when asked over the phone about the case booked by the Kuwait bank against her son. Going by the bank’s complaint, the son owed it ₹80.66 lakh.

“My son and his family, including a daughter with disability, moved to the U.K. when he got an opportunity there after serving in Kuwait for over 20 years. However, he didn’t have any intention to cheat the bank,” she says in his son’s defence.

She complains that the bank took away the post-service benefits and the compensation for COVID duty credited to his account, which, according to her, was sufficient to pay the EMI for at least five years.

“The bank took away all that was in his account and he ended up as a defaulter. He is willing to pay back the remaining amount, and all that he needs is some more time,” she says.

C. Unnikrishnan, a lawyer who represented some of the accused in similar cases, says the repayments could have been defaulted due to various reasons.

“While some would have intentionally defaulted on payments, there are also people who could not repay the loans due to genuine reasons, including job loss and closure of business. In such cases, they can prove before the court how and why their repayment capacity diminished,” he says.

“They also need to prove that they didn’t have any criminal intention to skip the loan repayment, to avoid the criminal charges of cheating. If the civil courts in Kuwait have passed any decree after giving them opportunities to be heard, such decrees could be executed here. If the accused are not offered the opportunity to defend their case and ex parte orders are issued, the accused can take the defence that they were not heard and natural justice was denied to them, and, hence, the decree shall not be executed in India,” says Unnikrishnan.

Meanwhile, the Economic Offences Wing (EOW) of the State Crime Branch has taken up the investigation into the complaints filed by Gulf Bank.

“The investigation is in the initial stages, and we are examining the transactions made by the accused both in Kuwait and Kerala. Those who did not repay the loan despite finding another job are being tracked closely,” says N. Rajesh, Superintendent, EOW.

The complaints filed by Al Ahli Bank may also be handed over to the EOW, considering the similarities and gravity of the offences, indicate sources. The police have invoked the charge of cheating under Section 420 of the Indian Penal Code against the defaulters, among other charges.

“The banks have also invoked Section 208 of the Bharatiya Nagarik Suraksha Sanhita, which states that an Indian citizen who commits a crime overseas should be subject to the same legal consequences as if the crime has been committed in India. The police will have to obtain a sanction from the Central government while filing a chargesheet for trial in the cases,” says Thomas.

Repercussions for diaspora

Kuwait’s Malayali diaspora has already started feeling the heat of the incidents, their representatives say. “Kuwaitis used to consider Indians, especially Keralites, as a risk-free category of customers when it came to sanctioning loans. However, it appears that the latest incidents have dented the image that we once enjoyed,” says Farooque Hamadani, vice-president of the Kerala Muslim Cultural Centre, Kuwait.

NoRKA-Roots, a field agency under the State government’s Department of Non-Resident Keralites Affairs, is miffed at the developments. Ajith Kolassery, Chief Executive Officer, says the cases have caused a trust deficit among Kuwaitis towards Keralites.

“Malayalis have been accepted globally for their abilities of cultural integration, adaptability, and peace-loving nature. These incidents have defeated those traits. It has left a blot on the image of the Indian population there,” he says.

The agency is planning to include financial literacy in its pre-departure orientation programme for nurses going abroad for employment.

As Qattan and his colleagues prepare for a long-drawn legal battle in Kerala, the developments have presented sleepless nights for those involved in the cases and their family members. Like the mother of Kottayam, who gets unnerved every time the telephone rings.