Responding to the PNB fraud, the finance minister Arun Jaitley today called for an end to “unethical behavior” between lender-borrower relations. While addressing the Economic Times Global Summit 2018, Jaitley said, “Unethical behavior in lender-borrower relation has to end, the industry needs to get into the habit of doing ethical business.”
The finance minister also highlighted the importance of regulators in stopping scams and said that they need to be more cautious. “Regulators have a very important function, regulators ultimately decide the rules of the game and they have to have a third eye which perpetually be open. Unfortunately, in the Indian system, we politicians are accountable but regulators are not,” Jaitley said. Jaitley argued that cases like PNB fraud, in which jeweler Nirav Modi, along with his uncle Mehul Choksi, fooled the bank of Rs 11,300 crore, impacts the ease of doing business in the country. “Cases of willful default is something which is much more than a business failure and also bank frauds. If you periodically have incidents like these, the entire effort of ease of doing business goes to background and these scars on the economy take the front sea,” the finance minister said.
Jaitley said that it is a reason for worry that a scam of such an enormous magnitude was arranged in spite of multiple layers of auditing it. The finance minister said, “If a fraud is taking place in multiple branches of the banking system and no one raised the red flag, doesn’t that become worrisome for a country. Similarly, top management who were indifferent, multiple layers of auditing system which chose to look other way, it creates a worrisome situation.” Prior to this week, the finance minister had slammed the public sector banks for not protecting taxpayers’ money spent to keep them afloat and cautioned that the government would explore every option to punish the “cheats” accountable for bank frauds.
“The first important question is with regard to the lack of ethics that a section of Indian business follows. Therefore, it is incumbent on us, as the state, till the last legitimate capacity to chase these people to the last possible conclusion. To make sure that the country is not cheated,” the finance minister said in his first comments following the PNB fraud came in public.