Finance Minister Arun Jaitley on Saturday warned borrowers who do not return money to lenders with dire consequences, saying that the unethical practice of not returning money has to stop and that tighter laws will be in place soon. “The old concept that the money that has been borrowed may or may not be returned has to end now. The law would be tightened to ensure criminal acts in business punished wherever the culprit is,” Arun Jaitley said at an event.
The Finance Minister, speaking in the context of the Rs 11,400 crore fraud at the Punjab National Bank, once again flagged the role of regulators, auditors, and bankers in letting it go unnoticed for a long time. “If a fraud is taking place in various branches of the banking system and not one employee raised a red flag, auditors looked the other way or did a casual job and the management remained unaware, it is worrisome for the country,” he said.
As India made a big leap on the Ease of Doing Business index to top 100 last year, Arun Jaitley said that it is not only government’s responsibility, but that of business too. He said that the country is needed to move from the ease of doing business to the habit of doing ethical business. “Wilful default is much more than business failure and bank frauds if you have a period of these events, then they take the Ease of Doing Business in the background.”
He also defended the idea of electoral bonds to clean the political funding. He said that even as some critics are raising the issue of anonymity of donors donating through electoral bonds, it is still better than the old system, in which there was 100% anonymity and there was the presence of unclean money. “In the present system, there is 100% anonymity. Nobody knows who is giving, how much is he giving… and it was coupled with unclaimed money,” Arun Jaitley said.
“Electoral bond system is clean money. It will be reflected in the balance sheet of political parties. It is a way of switching from unclean to clean money,” he added. The government has announced that the first batch of electoral bonds will be issued between March 1 and 10 at four branches of the State Bank of India (SBI).