New Delhi, Feb 26: The ASSOCHAM on Sunday proposed that business loans should not be permitted to halt, in the wake of the 1.77 billion dollar Punjab National Bank (PNB) fraud case.
Besides, it ascertained that any halt in business loan would be undermining. It would set in among the top officials and employees of the state-owned banks, something the country cannot afford at a time when the credit growth was about to improve and the economy was set to grow at a higher velocity.
ASSOCHAM Secretary General D.S. Rawat said, "while we may seek long-term solutions like privatisation of the banks, the need of this hour is to rally around honest bank officers and the honest business entities which have built trust on each other. Let one or a few black sheep not derail our financial system, which is resilient enough to withstand this kind of shocks, though ideally such jolts are better avoided and averted through systemic reforms."
The ASSOCHAM further said, "the letters of credit or letters of the undertaking are an internationally accepted system of global trade. While we need to ensure safe and sound functioning of the system and not allow loopholes like those in the PNB system of money or guarantee transfer, let banks not over-react and hit the trade and industry."
"By all means, punish the offenders at a fast speed and set examples; but the business should not be allowed to halt. There is a need for vigilance among all the lenders, even in the private sector. After all, in an ever-connected world, there are several common technology pathways, which can be subverted. It is about time to restore confidence and move on," it added.