Sir,
Barely days after news of the 11,500 crore fraud at Punjab National Bank broke, another but very different scam of 3,695 crore wilful loan default has surfaced. In the case of the Punjab National Bank fraud, letters of undertaking were issued bypassing the bank’s reporting system, the three-tier audit failed to detect the malfeasance. In contrast, BoB was not oblivious of the Rotomac default and took unconscionably long to act. It is important to determine why the Reserve Bank of India, which is vested with keeping an eye on bank books, was unable to take prompt corrective action in this case. It seems that the secret lies under it being hidden from people. Moreover, the economic cost of doing otherwise is too painful to imagine now.
Yours etc…
Ashfaque Nadvi
Hyderabad
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