Finance Minister Arun Jaitley said supervisory agencies need new measures to prevent stray bank frauds from become a pattern.
“There is also an important challenge where the supervisory agencies have to now introspect as to what are the additional mechanisms that they have to put into place to make sure that stray cases don't become a pattern," Jaitley said today, speaking for the first time after the fraud at India's second-largest public lender Punjab National Bank unfolded. Such cases should be put to an end early so that they are not repeated, he said.
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The situation throws up several important questions about the lapses in the banking system, he said addressing a gathering in New Delhi. There's lack in ethics that a section of Indian business industry follows, he said, and it's incumbent on the government to chase them so that the country is not cheated.
Since the authority to run the banks is given to managements, they are expected to utilise that effectively, he said. “You are found lacking when you are unable to check who among them were delinquent.”
Jaitley said the auditors failed to do their job and should start introspecting what legitimate actions are to be taken.
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“This kind of developments have a cost to the country and a cost to the taxpayer. That's a direct cost, and it has an indirect cost that it impinges on development, which impinges on the lending capacity of banks and therefore impinges upon developmental finance,” Jaitley said.
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