Limit collateral damage from bank frauds: Assocham

We can learn a lot from the US experience of handling the global financial crisis of 2007-08, said the business chamber

GN Bureau | March 12, 2018


#Punjab National Bank   #Assocham   #PNB fraud   #Banking   #Nirav Modi  

All out efforts must be made by banks, regulators, government and India Inc to limit the collateral damage from the fraud in PNB, said Assocham.

It cautioned over-reaction by the banks and the investigative agencies since it would hurt essential credit disbursement to the trade and industry and hamper the growth expectations.

“Following unearthing of the alleged scams and the media headlines, the banks are becoming cautious while there is a perceived public pressure on the regulators to act tough.  Given the scale of the problem, the level of noise may be justified, but it could cause a huge loss of confidence. So, it is time to show immense restraint and use the adverse situation as an opportunity to fix the systemic issues," said Assocham secretary general D S Rawat.

The chamber said: “We can learn a lot from the US experience of handling the global financial crisis of 2007-08. The US authorities worked at the root of their banking system and have put in place some robust risk mitigation and prudent system.”

In the present Indian situation while the debate on reducing government stake to below 50 percent should be encouraged, some immediate steps should be taken to  do the capacity building in the PSU banks, enabling them to prevent, detect and act on frauds.

Given the technology disruption taking place and India's ambitions to enhance digital footprints, it is all the more important to put in place robust systems which are well beyond compromise, the Assocham said in a press statement.

It said given the nature of fast changes, the PSU banks with full support from the government and the RBI, need to develop expertise in specific business verticals. “Lending to infrastructure projects is not the same as lending for retail trade, transportation or operating in the bond market. A new approach is needed for technological and human resource upgrades," said Rawat.
 

Comments

 

Other News

FM concludes pre-budget consultations

Union minister for finance and corporate affairs Nirmala Sitharaman has concluded the pre-budget consultation meetings for Budget 2023-24 that were held from November 21 to 28 in the virtual mode. More than 110 invitees representing seven stakeholder groups participated in eight meetings sch

Coal production rises by 18% to 448 MT

The total coal production in the country stands at 448 million tonnes (MT) for the month of October 2022 which is 18% higher than the production of the corresponding period of last year. The growth of coal production from Coal India Ltd (CIL) is also more than 17%. The ministry of coal said

How to execute large-scale social impact projects

The number of social innovators and entrepreneurs has considerably increased recently in India. The idea of social entrepreneurship, which aspires to provide novel solutions for the world`s most critical social issues, is now receiving more attention. Challenges like overworked healthcare,

Plastic is no longer a waste management issue

Plastic is arguably the most ubiquitous material of our times. In this Age of Plastic, it might seem its use can’t go up any further – and yet it keeps going. Between 2000 and 2015, global production of plastic increased by a whopping 79%. The total mass of plastics on our planet is now twice t

Celebrating the Ganit of Protein!

“Why is the child growing?” is the question that bothers a lot many in the administration. The answer, to be honest, is to be discovered via science, and less via what we call ‘effective administration’. Eventually, it will be the latter that will enforce the former on the field, bu

Trying to achieve work-life balance? Here’s some advice

The untapped potential of every individual is the biggest tragedy of the human race. The primary reason for this is our lack of awareness of the processes, tools and t

Visionary Talk: Amitabh Gupta, Pune Police Commissioner with Kailashnath Adhikari, MD, Governance Now


Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter