Arun Jaitley slams PNB of lack of ethics

  • Arun Jaitley slams PNB of lack of ethics
24-02-2018 | Pratidin Bureau. |

Finance Minister Arun Jaitley speaking on the scandal enveloping Punjab National Bank condemned the bank of lack of ethics in certain sections of businesses and said multiple layers of auditing system chose to either look the other way or did a casual job.

Jaitley blamed inadequate scrutiny by regulators and auditors as well as careless bank management for the Rs 11,400-crore fraud at India's second-biggest state-owned lender, and said if needed law would be tightened to punish fraudsters.

Without naming either the alleged kingpin of the fraud, billionaire jeweller Nirav Modi, or PNB, he said it is "worrisome" that not a single red flag was raised when the fraud was perpetuated. Also, daunting is "top managements who were indifferent to what was going on or were unaware of what was going on," he said at The Economic Times Global Business Summit.

There were "at least multiple layers of auditing system which chose to either look the other way or do a casual job. You had inadequate supervision," he said. "Therefore, I think who did what, will eventually find out in the course of investigation."

Nirav Modi, whose diamond creations have draped Hollywood stars such as Kate Winslet and Dakota Johnson, his uncle Mehul Choksi and firms linked to them are alleged to have acquired fraudulent letters of undertaking (LoUs) from one PNB branch in Mumbai between 2011 and 2017 to obtain loans from Indian banks overseas for which they were ineligible.

Investigative agencies have raided their properties and arrested bank employees and persons linked to his firms.

"Regulators have a very important function. Regulators ultimately decide the rules of the game and regulators have to have a third-eye which is to be perpetually be open," the Finance Minister said."But unfortunately in the Indian system, we politicians are accountable, the regulators are not."

Stating that unethical practices in lender-borrower relationship where borrowed money is not intended to be returned should end, he said the initial experience of insolvency and bankruptcy code, where recoveries are made from serial defaulters by selling assets, has been reasonably transparent and objective.

Tags : Arun Jaitley Punjab National Bank Nirav Modi India News

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