Bank Scams: Unlike politicians, regulators have been unaccountable : Arun Jaitley
NEW DELHI: Lamenting that cases of bank frauds put the efforts to boost the economy on the backseat, Finance Minister Arun Jaitley said that cases of willful default are something much more than a business failure and also bank frauds.
“If you periodically have incidents like these, the entire effort of ease of doing business goes to background and these scars on the economy take the front seat,” Jaitley said.
Speaking about the Rs 11,400 fraud in the Punjab National Bank, he said that such a case is worrisome. “If a fraud is taking place in multiple branches of the banking system and no one raised the red flag, doesn’t that become worrisome for a country.He also slammed the regulators for failing to detect the PNB fraud.
Finance minister Arun Jaitley hinted that laws to punish bank fraudsters may be tightened to bring an end to the unethical lender-borrower relations in the country.
He singled out the large number of shell companies and round-tripping as the malpractices that the government plans to target first.“If a fraud is taking place in various branches of the banking system and not one employee raised a red flag, auditors looked the other way or did a casual job and the management remained unaware, it is worrisome for the country,” Jaitley said at a media event in the capital.
Jaitley also questioned the role of the bank’s internal and external auditors and asked why they had not been able to detect the fraud that had been going on for seven years. Speaking on the PNB scam for the second time in a week, he reiterated that the government would chase the loan defaulters.
He said that unlike politicians, regulators have been unaccountable till now. He pressed for regulators to keep their “third-eye” open to detect frauds.Similarly, the top management who were indifferent, multiple layers of auditing system which chose to look other way, it creates a worrisome situation,” he said adding that the industry needs to get into the habit of doing ‘ethical’ business.
FM said 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, he said. If needed laws will be tightened further to punish delinquent persons,” he said
“When authority is given to the managements you are expected to utilise that authority effectively and in a right manner. Therefore the question for the management itself is were they found lacking? And on the face of it the answer seems yes they were,” he said. (With Agency Inputs ).
