Livemint   The Rs11,400 crore PNB fraud also likely to create a challenge for chief executive

by N.S. Venkataraman    21/2/2018

Indians living in India and abroad as well as those familiar with the banking operations in the world were shocked when the huge scandal in the Government of India owned Punjab National Bank came out in the open. The entire country is now looking to the Prime Minister Narendra Modi to take very stringent action to catch and punish the culprits and ensure that such scandal would not be repeated in India in any other bank, whether government-owned or private sector.

However, Mr. Modi has not spoken on the subject yet, though one can be sure that he is highly concerned and is presently directing the officials with firm instructions to deal with the matter as a matter of highest priority.

After a few days, now the finance minister has spoken on the subject and said that the culprits would be chased. He found fault with the bank managers and chartered accountants in general terms but did not say anything beyond this. One can reasonably think that finance minister is loathed to talk on the subject in a detailed manner before the completion of the investigation, which is presently being carried out by the government. While he is right in trying to be extremely careful at this stage, he should also understand that people of India are highly agitated and frustrated about the scandal in Punjab National Bank and want swift actions. They want to know what the government proposes to do.

In the absence of quick actions, Modi government may be running the risk of being blamed by the people for the unhappy events. Those in opposition political parties are already blaming Modi government but, people, by and large, are not convinced that Modi government should be blamed entirely at this stage.
There is certainly a large section of people who understand that government cannot be aware or follow at micro level all the happenings in every public sector bank or other public sector companies or establishments, as the board of directors have been appointed and are expected to run the administration in an efficient and fair manner.

Obviously, the directors on the board of Punjab National Bank should be held collectively responsible for the scandal. Certainly, their inefficiency or lack of commitment or lack of-of personal probity have resulted in such corruption of massive proportions. While a few officials in the bank at various levels and the officials belonging to the corrupt business house who have taken the loan have been arrested, the directors of Punjab National Bank cannot be allowed to go scot free.

While the investigations are going on to fix the culprits for the scandal, it is extremely undesirable that the directors who hold the post in the scandal-ridden bank are allowed to continue in the post, as they can tamper with the records and take some mischievous steps to conceal the facts and protect themselves.

Naturally, people are asking why the directors of the bank have not been sacked so far.
While the finance minister has said that the culprits would be chased and some arrests have been made, countrymen are not satisfied.

People certainly ask that why not remove all the directors of the bank immediately by asking them to go on leave and subject themselves to detailed investigation. Suspension of them at this stage may not be appropriate before completing the investigation, as they would go to court and get a stay order. The government should constitute an ad-hoc committee of retired senior bank officials with a blemishless track record to run the show until alternate arrangements are made.

A special investigation committee should be set up with persons of credibility with experience in banking operations, chartered and cost accountancy and criminal investigation to conduct the inquiry and fix the responsibility for the scandal within three months.

People should be told about the steps being taken from time to time and communication by the Modi government with the common man in this regard is extremely important so that no misinformation would spread by the news-hungry media.

This is the minimum that Mr. Modi should do to convince the people that he is committed to rooting out corruption not only in Punjab National Bank but all the banks in the country.