NEW DELHI: A day after Reserve Bank of India governor Urjit Patel sought to shift the blame for the Punjab National Bank fraud on the govt, officials said on Thursday that the regulator had sufficient powers to behave against errant lenders.
The commentary, which is expected to prompt a recent verbal duel between North Block and Mint Road came after Patel pointed to the “blame game” after the fraud and instructed that RBI did not have sufficient powers to keep watch over public sector banks.
Government resources said that contrary to the case being made out by means of the governor, best RBI had the ability to have a look at explicit loans or different exposures of banks, one thing the government did not have.
Annually, RBI opinions lending policies and different practices comparable to those related to forex and conducts inspections of all banks.
In fact, it used to be RBI which compelled all banks, led by means of the public sector, to properly recognise NPAs of their books, resulting in a surge of their inventory of bad debt, pushing a number of of them into losses.
While Patel had pointed to a lack of powers to take away directors and management of state-run banks or force a merger, he did not address concerns flagged by means of the government on how supervisors missed the gaps in PNB right through their inspections over the past seven years.
Besides, officials said in contrast to non-public banks, the government used to be the promoter of the state-run players however did not have a say in day-to-day management of those entities.
After the PNB fraud, the government had blamed financial institution managements, RBI and auditors for lapses, ensuing into the fraud of over Rs 12,000 crore. The finance ministry had additionally written to the regulator, in what used to be seen as a rare advisory from the government.
The commentary, which is expected to prompt a recent verbal duel between North Block and Mint Road came after Patel pointed to the “blame game” after the fraud and instructed that RBI did not have sufficient powers to keep watch over public sector banks.
Government resources said that contrary to the case being made out by means of the governor, best RBI had the ability to have a look at explicit loans or different exposures of banks, one thing the government did not have.
Annually, RBI opinions lending policies and different practices comparable to those related to forex and conducts inspections of all banks.
In fact, it used to be RBI which compelled all banks, led by means of the public sector, to properly recognise NPAs of their books, resulting in a surge of their inventory of bad debt, pushing a number of of them into losses.
While Patel had pointed to a lack of powers to take away directors and management of state-run banks or force a merger, he did not address concerns flagged by means of the government on how supervisors missed the gaps in PNB right through their inspections over the past seven years.
Besides, officials said in contrast to non-public banks, the government used to be the promoter of the state-run players however did not have a say in day-to-day management of those entities.
After the PNB fraud, the government had blamed financial institution managements, RBI and auditors for lapses, ensuing into the fraud of over Rs 12,000 crore. The finance ministry had additionally written to the regulator, in what used to be seen as a rare advisory from the government.
Govt snubs RBI, says it has enough powers
![Govt snubs RBI, says it has enough powers]()
Reviewed by Kailash
on
March 16, 2018
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