Finmin seeks RBIs view on lapses in banking system

Finmin seeks RBIs view on lapses in banking system

New Delhi, Feb 19 (PTI) The finance ministry has sought the Reserve Banks 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 to the RBI to explain the shortcomings in the system which let the fraud to go undetected for 7 years, they said.

The letter also seeks the regulators advice on what system and processes need to be updated so that such frauds are prevented, sources added.

Besides, the ministry has also sought RBIs view on failure of auditors to detect fraud that has been going on since 2011.

PNB, the countrys 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. PTI DP NKD CS SA