Money & Banking

Government to look at all aspects of PMC bank crisis: MoS Finance Anurag Thakur

K R Srivats New Delhi | Updated on September 30, 2019 Published on September 30, 2019

Anurag Thakur, MoS Finance   -  Kamal Narang

Auditors, bank directors are equally responsible as the regulator for the incident

The Government would look into all aspects of the recent Punjab and Maharashtra Cooperative Bank (PMC) crisis, Anurag Thakur, Minister of State for Finance has said.

Read: PMC Bank: RBI raises withdrawal limit to ₹10,000

“PMC is an eye-opener for the banking sector that such incidents should not take place at the outset. It also raises a question mark on the role of various people including regulator, auditors and bank directors. Government will look into all areas as it impacts the common man”, Thakur told reporters after inaugurating Punjab National Bank's (PNB) Heritage Museum at the bank’s Corporate Office in Dwarka.

He was responding to a query on whether the Government felt that Reserve Bank of India (RBI) should have acted earlier in tackling the PMC crisis.

“I think the role of regulator is very important. At the same time I think the role of auditors, directors and bank officials is equally important and what they were doing all these years and allowed this to happen,” he said.

$5 trillion economy

Earlier, in his address at the PNB event, Thakur said that banks are the backbone of the economy and they have a crucial role to play in achieving $ 5 trillion economy by 2022-23.

"It (achieving $5 trillion economy) is doable with the help of banks," he said.

He said that bankers have nothing to fear about investigative agencies so long as they take bonafide commercial decisions.

Thakur also said that Government has gone about with the mega bank mergers decision to build capacity and strengthen the competitiveness of the banks in the global arena.

Use NCLT as last resort

Thakur advised the PNB, which is the second largest public sector bank in the country, to aim for the pole position, stating that it is very much attainable.

He urged PNB to use the National Company Law Tribunal (NCLT) process for recovery only as the last resort. "There are several methods available outside NCLT that must be first explored before going in for NCLT," he said.

Thakur asked PNB to be supportive to businesses and wanted the bank to specially focus on helping farmers, MSMEs and young entrepreneurs.

Sunil Mehta, PNB's outgoing Managing Director & CEO, said that PNB has bounced back after facing turbulence in recent years due to a fraud incident (Nirav Modi perpetrated scam) that shook the bank.With the support of Government, PNB has been able to handle the crisis, transform itself with improved processes and is now well entrenched on the growth path, Mehta said. "PNB has honoured all its obligations while becoming even stronger post the crisis," he said.

Published on September 30, 2019
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