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  1. Finance Ministry gives public sector banks 15-day deadline for pre-emptive plan to combat risks

Finance Ministry gives public sector banks 15-day deadline for pre-emptive plan to combat risks

Financial Services Secretary Rajiv Kumar said today that public sector banks (PSBs) have been given a 15-day deadline to take "pre-emptive" action for identifying gaps and to gear up for rising operational and technical risks, as the scam in the PNB widened to Rs 12,700 crore.

By: | New Delhi | Updated: February 27, 2018 4:06 PM
Finance Ministry, public sector banks, Rajiv Kumar, Punjab National Bank fraud case, pnb scam, banking sector  The financial services secretary further said that it will be the responsibility of “Group of EDs and CTOs” to learn from best practices across the banking sector and identify weakness in existing arrangements. (Reuters)

Financial Services Secretary Rajiv Kumar said today that public sector banks (PSBs) have been given a 15-day deadline to take “pre-emptive” action for identifying gaps and to gear up for rising operational and technical risks, as the scam in the PNB widened to Rs 12,700 crore. Executive Directors and chief technological officers (CTOs) of PSBs have been asked to prepare a blueprint to enhance preparedness for combating increasing risks. “15 days deadline for PSBs to take pre-emptive action and identify gaps/weakness to gear up for rising Ops and Tech risks; To learn from best practices and pinpoint strategies including tech solutions; clear accountability of senior functionaries,” Kumar said in a tweet.

Late last evening, scam-hit Punjab National Bank said that the amount involved in the fraudulent transactions could increase by USD 204.25 million from the earlier estimate of USD 1.77 billion. On February 14, PNB had detected the fraud wherein billionaire jeweller Nirav Modi and associates allegedly cheated the bank by acquiring fraudulent letters of undertaking (LoUs) from one of its branches for overseas credit from other Indian lenders.

The financial services secretary further said that it will be the responsibility of “Group of EDs and CTOs” to learn from best practices across the banking sector and identify weakness in existing arrangements. They will have to come out with comparative assessment of their banks’ operational risk management practices with best practices and “identify gaps and areas for improvement”.

The Group has to prepare report based on best practices and minimum acceptable standards and suggest action points including technological solutions. Boards of banks have to assign clear accountability to senior functionaries for implementation and compliance of the report, Kumar added.

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