There has been no apparent audit by the RBI during the period of the scam, said CVC K V Chowdary.
Rs 13000 crore PNB scam that was reported in February this year has sent shock wave across the banking sector. Since then the investigative agencies have come out with various reports which show how the bank fraud accused exploited various loopholes existing in the banking system. Finance Ministry has even rapped the Reseve Bank of India (RBI) in not properly fulfilling its duties of banking regulator. In the latest, Central Vigilance Commissioner (CVC) while apportioning blame to the Reserve Bank of India (RBI) over the PNB loan fraud on Tuesday said that a more robust auditing system system needs to be put in place in order to avoid PNB-type scams. There has been no apparent audit by the RBI during the period of the scam, The Indian Express reported citing CVC K V Chowdary.
The CVC exercises superintendence over the Central Bureau of Investigation (CBI) which is currently investigating the fraud. The RBI has changed to ‘risk-based’ audit from the earlier followed periodic audit. During the period of fraud, the RBI didn’t conduct any audit, the report cited CVC K V Chowdary. The new audit system is good but how does the RBI determine the risk parameters and how this fraud didn’t come to light are a few matters of detail, he said.
It was on 14 February that the Brady House branch of PNB reported a fraud to the tune of Rs 11,700 crore. The fraud amount increased as CBI and ED began with investigation. Now the scam amount stands at nearly Rs 13,000 crore. The prime accused in the fraud is billionaire diamond jeweller Nirav Modi who along with his uncle mehul Choksi connived with former bank officials to generate fake letters of undertaking (LoUs) and avail credit from a few foreign branches of the Indian banks.