New Delhi, Feb 21: The Finance Minister Arun Jaitley said at the 41st Annual Meeting of Association of Development Financial Institutions in Asia and Pacific (ADFIAP), "it is incumbent upon the state to chase those who cheat the banking system."
The Finance minister declared that the banking method depends on trust, which sets the basis for the correlation between the borrower and the lender.
Arun Jaitley emphasized that the government gave power to the bank administration to operate with sovereignty. And one expects effective utilisation of the authority in the right manner, he said.
During the speech, Arun Jaitley said, "when authority is given to the management then you are expected to utilise authority effectively and in the right manner and therefore a question for management is if they were found lacking, on the face of it seems they were."
The supervisory offices shall evaluate what new methods had to be established to find those who were defrauding banks.
While concluding his speech, he said, "also what were auditors doing? If both internal and external auditors have looked other way and failed to detect then I think CA professionals must introspect. Supervisory agencies also must introspect what are the additional mechanisms they have to put in place."
A few weeks ago a massive misappropriation of funds was detected at the Punjab National Bank. It was identified as a 1.77 billion dollar scam. In this huge scam, the Jeweller Nirav Modi has acquired fraudulent letters of undertaking from one of the branches of the Punjab National bank for overseas credit from other Indian banks.
According to reports, the scam episode was started in 2011. But it was detected only during the third week of January 2018. Later the PNB officials themselves have reported it to the Enforcement Directorate.
Eventually, the Punjab National Bank has filed another complaint with the CBI on February 13.
It was on January 28th that the CBI had received a complaint from the PNB. A case was registered later on January 31.