PNB Fraud: Finance Ministry Seeks RBI’s View On Lapses In The Banking System
The finance ministry has sought the RBI’s view on the lapses in the banking system that led to PNB fraud.
The finance ministry has sought the Reserve Bank of India’s view on the lapses in the banking system that led to the Rs 11,400 crore fraud at the Punjab National Bank and steps required to check recurrence of such incidents, sources said.
Department of Financial Services has written a letter asking the RBI to explain the shortcomings in the system that let the fraud go undetected for seven years, sources added.
The letter also seeks the regulator’s advice on what systems and processes need to be updated so that such frauds are prevented. Besides, the ministry has sought the RBI’s view on failure of auditors to detect fraud that has been going on since 2011.
PNB, the country’s second largest bank, has reported a fraud of Rs 11,400 crore, where in Letters of Undertaking (LOUs) were fraudulently used allegedly by companies owned by billionaire jewellers Nirav Modi and Mehul Choksi.
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