Jaitley slams banking regulators
India's Finance Minister Arun Jaitley has flayed the country's banking regulators for failing to detect the $1.77 billion fraud at the country's second largest bank—Punjab National Bank—for seven long years.
If necessary, the laws will be further tightened, he said at a seminar on the scam in New Delhi on Saturday.
Jaitley said it is worrisome to find that the bank's employees are conniving with the fraudsters. Also worrisome is that no red flag was raised, he said.
Regulators should have a 'third eye' open to detect and check such frauds, Jaitley said.
He also slammed the bank's management for failing to do their job saying inadequate supervision and top management being unaware of what was going on in the bank was worrisome.
Jaitley said the industry needs to get into the habit of doing ethical business as such frauds are 'scars' and push reforms and ease of doing business to the background. Unethical behaviour in the lender-borrower relation has to end, the finance minister said. "If needed, laws will be tightened further to punish delinquent persons."
Billionaire diamond merchant Nirav Modi and his uncle plus business partner Mehul Choksi and others are being investigated by the Indian security agencies for their involvement in the fraud.
The fraud recently came to light following a complaint by the Punjab National Bank that they allegedly cheated the nationalised bank to the tune of Rs 11,400 crore with the purported involvement of a few employees of the bank.
Two first information reports (FIRs) have been registered to probe the case. Both Modi and Choski are now abroad and said to have left India before criminal cases were lodged against them.
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