The Finance Ministry said overseas operations of public sector banks will be rationalised as part of the government's efforts to improve synergies and boost cost efficiencies.
35 foreign operations of state-owned banks will be consolidated without affecting international presence in these countries, Rajiv Kumar, secretary in the Department of Financial Services tweeted today. 69 other operations, including bank branches, joint venture subsidiaries, remittance centres, and representative offices have already been identified for further examination, he added.
#ResponsibleBanking; PSBs to consolidate 35 overseas operations without affecting international presence of PSBs in these countries; 69 ops identified for further examination. Move towards cost efficiencies and synergies in overseas mkt @PMOIndia @FinMinIndia @PIB_India pic.twitter.com/tVYMcEmXK3
March 1, 2018As part of the reform agenda, all 216 overseas operations of state-owned banks will be examined, and non-viable activities will be closed, Kumar added. Operations in the same geographies will be consolidated.
On Feb. 28, the Finance Ministry had directed all state-owned banks to review all their loans above Rs 50 crore, for fraud. The ministry also gave the lenders a 15-day deadline to develop a blueprint to deal with operational challenges and technological risks.
The directions come at a time when Punjab National Bank has disclosed that fraudulent transactions by billionaire jeweller Nirav Modi and related entities could be Rs 1,300 crore more than the initial estimate of about Rs 11,400 crore. Finance Minister Arun Jaitley had blamed inadequate oversight by regulators and auditors as well as sloppy bank management for the fraud at India's second-biggest state-owned lender and said if needed, the law would be tightened to punish fraudsters.
Since the PNB fraud came to light, a consortium of seven state-owned banks filed a complaint against Rotomac Global Pvt. for alleged loan default of Rs 3,695 crore, and the Central Bureau of Investigation registered a case against Simbhaoli Sugars Ltd., its Chairman Gurmit Singh Mann, Deputy Managing Director Gurpal Singh and others in connection with an alleged bank loan fraud of Rs 97.85 crore.
Also Read: PNB Fraud: New RBI Committee To Look Into Divergences, Frauds, Bank Audits
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
