New Delhi, Feb 27: Rajiv Kumar, Financial Services Secretary have announced on Tuesday that public sector banks (PSBs) are given a 15-days deadline to take "pre-emptive" measures to identify gaps and to gear up for rising operational and technical risks. This is in the wake of the PNB scam which widened to Rs 12,700 crore.
According to this move, the Executive Directors and chief technological officers (CTOs) of public sector banks have been asked to prepare a plan to intensify preparation for resisting the growing challenges.
Rajiv Kumar tweeted, "15 days deadline for PSBs to take pre-emptive action and identify gaps/weakness to gear up for rising Ops and Tech risks; To learn from best practices and pinpoint strategies including tech solutions; clear accountability of senior functionaries."
On Monday evening, the authorities of the Punjab National Bank has revealed that the amount stuck in the fraudulent transactions might be increased by USD 204.25 million. According to an earlier estimate, the amount was USD 1.77 billion.
The Punjab National Bank had detected the fraudulent transactions from one of its branches in Maharashtra on February 14, 2018.
In the scam billionaire diamond merchant Nirav Modi and associates allegedly cheated the bank by obtaining false letters of undertaking (LoUs) from one of its branches for receiving overseas credit from other Indian lenders.
He further said that it will be the duty of "Group of EDs and CTOs" to learn from best practices across the banking sector and to identify lapses in the existing methods.
They will have to come out with a comparative assessment of their banks' operational risk management practices with best practices and "identify gaps and areas for improvement".
Those responsible have to prepare a report on the basis of best practices and minimum acceptable standards and suggest action points including technological solutions.
Boards of banks have to assign clear accountability to senior functionaries for implementation and compliance of the report, Kumar added.