Amid the ongoing fiasco in India’s second largest public sector bank wherein a fraud to the tune of Rs 11,400 crore got detected, top industry voices from former RBI Deputy Governor Shyamala Gopinath and Edelweiss head Rashesh Shah have called for swift action by the regulator and a deeper study of what went wrong.
Amid the ongoing fiasco in India’s second largest public sector bank wherein a fraud to the tune of Rs 11,400 crore got detected, top industry voices from former RBI Deputy Governor Shyamala Gopinath and Edelweiss head Rashesh Shah have called for swift action by the regulator and a deeper study of what went wrong. “I think we need to understand how this happened, exactly find out the processes that were not followed, and we need to learn from this. We need to find out the weaknesses and deficiencies and address them,” Shyamala Gopinath told CNBC TV18 adding that there is no dearth of control and systems, and its a question of what got missed and how exactly it happened. The former banker called for deeper study of the issue.
Rashesh Shah of Edelweiss highlighted the importance of control systems and audit processes in an organisation. “The control systems and audit processes are very essential, and especially in an industry like banking. The government should act quickly. If somebody does something wrong and flees the country, it shows India in a very poor light,” Rashesh Shah told CNBC TV18, adding that the government should take strong punitive action against the culprits, which will serve as a deterrent to such scams in the future.
Meera Sanyal, the former top boss of Royal Bank of Scotland says that it remains a mystery as to how the scam remained undetected by the internal and external auditors. “It’s an extremely strange situation. It’s quite clear how the Rs 280 crore scam took place. How the amount rose to Rs 11,000 crore and went undetected is a bit of mystery,” Meera Sanyal former CEO & chairman of the in India told ET Now in an interview. The ace banker also shared that she was perplexed that the fraud went unnoticed and crossed the operational risk team, and the internal and external auditors.
According to a statement by Punjab National Bank on Wednesday, the quantum of unauthorised transactions was 11,400 crore. “Based on these (unauthorised) transactions other banks appear to have advanced money to these customers abroad. The quantum of such transactions is $1,771.69 million (approx). The matter is already referred to law enforcement agencies to examine and book the culprits as per law of the land,” Punjab National Bank had said in a statement.