#PNBScam: Will chase down fraudsters, says Jaitley blaming auditors, management
Finance Minister Arun Jaitley, finally breaking his silence on the Rs. 11,400cr PNB scam involving Nirav Modi and Mehul Choksi, blamed the bank's management and auditors for not detecting the fraud. He said those who cheat the banking-system would be chased down; measures for preventing scams would be put in place. Jaitley added such frauds affect the country, taxpayers, and development, too. Here's more.
Authority given to bank management should be utilized effectively
Addressing the banks, Jaitley said when the management have the power to take key decisions, they are also expected to use that authority effectively. He said the society has invested "so heavily in the banking system," and even PM Narendra Modi himself wants banks to be autonomous. Jaitley added, "None of us is going to call you (banks) up...therefore take your own decisions."
PNB management found lacking in detecting fraud: Jaitley
In his first public comments on the multi-crore PNB fraud, Jaitley slammed the bank saying one question for its management is: "Were they found lacking (in being able to detect the scam)?" He added: "On the face of it, the answer seems, yes they were (lacking). They were also found lacking in being able to check who amongst them were the delinquents here."
What were the auditors doing: Jaitley
The Finance Minister also raised questions over the role of auditors. He asked what the auditors, both internal and external, were doing over the past several years, adding they "really have looked the other way or failed to detect." Jaitley said, "I am sure...Chartered Accountants and those who control the discipline of the profession...will start introspecting and see what are the legitimate actions."
Additional mechanisms to check fraud, an important challenge: FinMin
"The supervisory agencies (involved in the banking system) have now to introspect what are the additional mechanisms they have to put in place to make sure that stray cases don't become a pattern and it is nipped in the bud," stated Jaitley.
Scams cost the country and taxpayers dearly
Arun Jaitley said the cheaters involved in the Rs. 11,400cr PNB scam should be made an example that such frauds should never be repeated. He said, "It is a direct cost, and it has an indirect cost, which impinges upon the bank's capacity as a lending institution." Jaitley added scams "have a cost" not only to the country but also its taxpayers and development.
Will chase cheaters till last legitimate capacity of state: Jaitley
Without directly naming Nirav Modi or Mehul Choksi, Jaitley stated: "With regard to lack of ethics that a faction of Indian business follows, it is incumbent on us as a state (to) chase these people...(and) make sure that the country is not cheated."
