Regulator, Auditor Should Be Held Responsible For Bank Frauds, Says Anurag Thakur
Minister of State for Finance Anurag Singh Thakur. (Photo: PIB)

Regulator, Auditor Should Be Held Responsible For Bank Frauds, Says Anurag Thakur

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The regulator, auditor and management should be held responsible for bank frauds like the one in Punjab and Maharashtra Cooperative Bank, Minister of State for Finance Anurag Thakur said on Thursday.

Thakur said that in case of PMC Bank, the Reserve Bank of India has allowed withdrawal of Rs 40,000, which covers around 77 percent of the affected people and they have been assured of up to Rs 1 lakh.

"As far as the PMC Bank or any other bank is concerned, it is the job of the regulators first to look into those issues. It is the auditor, who should be held responsible. It is the management of the bank who are dealing on a day to day basis and if any one is involved in fraud, Enforcement Directorate has taken action. People have been arrested. Their properties have been attached," Thakur said at Times Network India Economic Conclave event.

He was responding to queries on crisis at PMC Bank and depositors under stress.

Also read: PMC Bank Victims: Rs 1 Lakh Insurance In 1993 Should Be Rs 1 Crore Today

Thakur said the Bharatiya Janata Party government has brought in reforms to make balancesheet of banks healthy, which have doled out huge amount of loan during United Progressive Alliance II regime.

"It was the UPA 2 when from 2009 to 2014. If you look at loan till 2009, total outstanding was Rs 18 lakh crore. In 2014 , it came out to be Rs 58 lakh crore.

"When we took over, and the late Finance Minister Arun Jaitley ji went for asset quality review of the banks. We have cleaned the bank balance sheets. We have recapitalised them. We have gone for the merger which was suggested 20 years back to bring in more synergy and capacity building of the banks.

"Others are making profit. Bank like Punjab National Bank, which three years back was facing question, is in profit today. We brought in reforms like Insolvency and Bankruptcy code, fugitive economic offenders bill," Thakur said.

He said the government has been able to bring back Rs 1.78 lakh crore just because of the Insolvency and Bankruptcy Code.

"It has improved creditors debtors relationship. We have funded Rs 3.4 lakh crore through the banks to non-banking financial companies. All the steps have been taken," he said.

The minister noted that the government is taking the decision to make the fundamentals of the economy strong.

"We are taking every possible decision to boost investment and growth to achieve $5 trillion economy," Thakur said.

Also read: Sitharaman Promises Legislation To Uphold PMC Bank Depositors’ Interests

The International Monetary Fund on Tuesday slashed India's gross domestic product growth projection for the year 2019 to 6.1 percent, which is 1.2 percent down from its April projections.

The IMF in April said India will grow at 7.3 percent in 2019. However, three months later it projected a slower growth rate, a downward revision of 0.3 percent.

As against India's real growth rate of 6.8 percent in 2018, the IMF in its latest World Economic Outlook projected India's growth rate at 6.1 percent in 2019 and noted that the Indian economy is expected to pick up the next year at 7.0 percent.

Also read: World Bank Says India Faces Severe Slowdown, Cuts GDP Forecast

Thakur said that the fundamentals of Indian economy is strong and it will bounce back.

On questions related to slowdown, Thakur said that the traditional businesses are facing challenges from start-ups and new technologies.

"Till 2014, it (India) was $1.7-1.8 trillion economy. We have added $1 trillion in the last 5 years. If you could do that in the last 5 year, let me assure you we can achieve $5 trillion economy mark. Mr. (Narendra) Modi is known for big and bold decision. He has never failed. In 2025, we will be $5 trillion economy. You mark my words," Thakur said.

Also read: Fundamentals Of Economy ‘Very Very Strong’, Says Chief Economic Adviser Subramanian

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