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October 2018
7:31 AM IST
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Virat Kohli And Team India Gear Up For 1st ODI vs Windies With A Game Of Keepy-Uppy        Shuttler Srikanth out; Saina in final of Denmark Open        Amritsar tragedy: Women, children among 61 killed as rushing trains crush Dussehra revellers        Rahul Gandhi calls on Sri Lankan PM        Top Afghan Police Chief Killed In Shooting, US General Unhurt        Putin says IS seized 700 hostages in Syria; executing some        Ten-wicket Abbas destroys Australia for Pakistan's series win        Vijayan urges UAE Keralites to back salary challenge        Japan introduces Artificial Intelligence technology to ease business        Reliance Industries posts net profit of Rs 9516cr in Q2        ISL: Super-sub Maimouni Hands ATK First Win        Chris Morris returns for Australia tour        PCB chief urges Australia to return to Pakistan        Sri Lankan President assured of "fullest cooperation" by PM Modi        VP Naidu arrives in Brussels for 12th ASEM Summit        In Turkey, Pompeo discusses Iranian oil consumption, Khashoggi's disappearance        PNB Scam: ED seizes more assets of Modi, Choksi        Andhra CM visits cyclone-hit areas in Srikakulam        #MeToo fallout: MJ Akbar resigns as minister of state for external affairs        SC writ fails in Sabarimala, not a single young woman allowed by protesters        
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Business News
RBI submitted a list of high profile fraud cases to PMO: Rajan
 
New Delhi, Sep 11 (PTI) A list of high profile cases related to banking frauds was sent to the Prime Minister's Office (PMO) for a coordinated action, said former RBI Governor Raghuram Rajan in a note to Parliamentary panel.

In the note to Chairman of Estimates Committee Murli Manohar Joshi, Rajan said that the size of frauds in the public sector banking system has been increasing, though still small relative to the overall volume of NPAs.

"The RBI set up a fraud monitoring cell when I was Governor to coordinate the early reporting of fraud cases to the investigative agencies. I also sent a list of high profile cases to the PMO urging that we coordinate action to bring at least one or two to book. I am not aware of progress on this front. This is a matter that should be addressed with urgency," he said.

Rajan, who was RBI governor for three years till September 2016, is currently teaching at the Chicago Booth School of Business.

Noting that system has been singularly ineffective in bringing even a single high profile fraudster to book, he said, frauds are different from normal non-performing assets (NPAs).

"The investigative agencies blame the banks for labelling frauds much after the fraud has actually taken place, the bankers are slow because they know that once they call a transaction a fraud, they will be subject to harassment by the investigative agencies, without substantial progress in catching the crooks," he said.

The statement assumes significance in the light of Nirav Modi and his uncle Mehul Choksi, in connivance with certain bank officials, allegedly cheated PNB of about Rs 14,000 crore through issuance of fraudulent Letters of Undertaking (LoUs).

A Mumbai branch of PNB had fraudulently issued LoUs for the group of companies belonging to Nirav Modi since March 2011.

The total number of LoUs issued to the companies of Nirav Modi, his relatives and the Nirav Modi Group are 1,213, and to Mehul Choksi, his relatives and the Gitanjali Group are 377.

On whether the regulator could have done better, Rajan said it is hard to offer an objective self-assessment but the RBI should probably have raised more flags about the quality of lending in the early days of banking exuberance.

"With the benefit of hindsight, we should probably not have agreed to forbearance, though without the tools to clean up, it is not clear what the banks would have done. Forbearance was a bet that growth would revive, and projects would come back on track.

"That it did not work out does not mean that it was not the right decision at the time it was initiated. Also, we should have initiated the new tools earlier, and pushed for a more rapid enactment of the Bankruptcy Code. If so, we could have started the AQR (asset quality review) process earlier," he said.

Finally, he said, the RBI could have been more decisive in enforcing penalties on non-compliant banks.

"Fortunately, this culture of leniency has been changing in recent years. Hindsight, of course, is 20/20," he said.


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KERALA NEWS
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INTERNATIONAL NEWS
Top Afghan Police Chief Killed In Shooting, US General Unhurt
 (Kandahar, oct 19, 2018):Gen. Abdul Razeq, one of Afghanistan's most powerful security offici
Putin says IS seized 700 hostages in Syria; executing some
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NATIONAL NEWS
Amritsar tragedy: Women, children among 61 killed as rushing trains crush Dussehra revellers
 (CHANDIGARH, oct 19, 2018):At least 61 people, including women and children, were mowed down
Rahul Gandhi calls on Sri Lankan PM
PNB Scam: ED seizes more assets of Modi, Choksi
Andhra CM visits cyclone-hit areas in Srikakulam
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