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

India lost Rs 52,000 crore to cyber fraud in five years: DoT

India has lost more than Rs 52,000 crore to cyber fraud over the last five years, officials have revealed. Out of approximately 60 lakh cyber fraud complaints received, more  than 3,000 cases have been resolved and six cyber fraud setups have been busted.   On the occ

India must not wait for its own Ella

In many Indian cities, children learn to wear masks before they are old enough to understand why. That reality should alarm us far more than it does.   In 2020, nine-year-old Ella Adoo Kissi Debrah became the first person in the world to have air pollution officially recognized a

An ode to the cradle of humankind

The Alphabets of Africa: Poems By Abhay K. Vintage Classics, 280 pages, ₹499.00   Abhay K

Ahmedabad district railway network to be expanded

The Cabinet Committee on Economic Affairs, chaired by prime minister Narendra Modi, on Wednesday approved the Ahmedabad (Sarkhej) – Dholera Semi High-Speed Double Line project of Ministry of Railways with total cost of Rs. 20,667 crore (approx.). It will be Indian Railways 1st semi high-speed project

Indian Ocean more contested than ever: Western Naval Command Chief

The Indian Ocean is becoming increasingly contested and strategically significant as the Indo-Pacific emerges as the defining geopolitical theatre of the 21st century, Vice Admiral Krishna Swaminathan, Flag Officer Commanding-in-Chief of the Western Naval Command, has said.   Spe

Why the judiciary needs much more than four more judges

India has a particular form of governance theatre: the bold declaration that appears to be action but is actually a way of avoiding action. The Union Cabinet on May 5 approved a Bill to increase the sanctioned strength of the Supreme Court from 34 to 38. The decision has been touted as a step toward judici


Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter