PNB ‘stray case’, lack of ethics to blame: FM : The Tribune India

Join Whatsapp Channel

PNB ‘stray case’, lack of ethics to blame: FM

NEW DELHI:Breaking his silence over the Rs 11,400-crore fraud detected in Punjab National Bank (PNB), Finance Minister Arun Jaitley today blamed lack of ethics in a section of business, auditors and bank management for the challenges being faced by the banking system.

PNB ‘stray case’,  lack of ethics to blame: FM

Arun Jaitley, Finance Minister



Tribune News Service

New Delhi, February 20

Breaking his silence over the Rs 11,400-crore fraud detected in Punjab National Bank (PNB), Finance Minister Arun Jaitley today blamed lack of ethics in a section of business, auditors and bank management for the challenges being faced by the banking system. The state will chase down wrongdoers who cheat the banking system, he added.

Edit: The Nirav Modi malfeasance

Amid the PNB fraud, the Reserve Bank said it had cautioned banks thrice since August 2016 on the risks arising from potential misuse of SWIFT infrastructure, which was created by banks for their business needs.

Follow The Tribune on Facebook; and Twitter @thetribunechd) 

Without naming Punjab National Bank or the alleged kingpin of the scam Nirav Modi, Jaitley referred to these as “stray cases”. “With regard to lack of ethics that a faction of Indian business follows, it is incumbent on us as a state, till the last legitimate capacity of the state, chase these people to the last possible conclusion to make sure that the country is not cheated.” 

Speaking at an event, Jaitley said the system of banking depends on trust, the relationship of borrower and the lender. He added that the bank management did not live up to their task as it failed to detect the delinquent. He added that the government has given authority to bank managements to work with autonomy but with greater accountability to discharge this authority with responsibility.

The FM went on to blame auditors for being unable to detect irregularities, who he said were either looking the other way or failed to detect the irregularities.

He also asked the supervisory agencies to assess the system requirement to detect such frauds. He said supervisory agencies should ensure that stray cases are nipped in the bud and are never repeated.

The RBI said in a statement that the risks arising from the potential malicious use of the SWIFT infrastructure, created by banks for their genuine business needs, has always been a component of their operational risk profile.

“The RBI had, therefore, confidentially cautioned and alerted banks of such possible misuse, at least on three occasions since August 2016, advising them to implement the safeguards detailed in the RBI’s communications, for pre-empting such occurrences. Banks have, however, been at varying levels in implementation of such measures,” it said.

Further, in view of large divergences observed in asset classification and provisioning in the credit portfolio of banks as well as the rising incidence of frauds in the Indian banking system, the RBI said it has been decided to constitute an expert committee under the chairmanship of YH Malegam, a former member of the Central Board of Directors of RBI.


CBI arrests Nirav’s top gun Vipul Ambani

  • Vipul Ambani, the top executive handling finances of celebrity designer Nirav Modi’s firm, was among five officials arrested by the Central Bureau of Investigation on Tuesday evening. The arrests were made in two parallel bank fraud cases being investigated by the probe agency.
  • The CBI, which had already arrested five Punjab National Bank officials, has turned its attention to the role of senior executives of the private firms for the massive bank frauds linked to companies run by Nirav Modi and his uncle Mehul Choksi. 

Top News

Raj Thackeray meets Home Minister Amit Shah ‘to keep Uddhav Thackeray factor’ at bay

Raj Thackeray meets Home Minister Amit Shah ‘to keep Uddhav Thackeray factor’ at bay

If the alliance is sealed, the MNS may be given one seat to ...

Lok Sabha polls: PM Modi holds massive roadshow in Palakkad

Lok Sabha polls: PM Modi holds massive roadshow in Palakkad

Modi’s Palakkad roadshow follows his recent participation at...


Cities

View All