NEW DELHI: Finance Minister Arun Jaitley today slammed regulators for failing to detect the Rs 11,400-crore fraud at Punjab National Bank for seven long years, saying unlike politicians, regulators in the Indian system are unaccountable.
Speaking on the scam for the second time this week, he said employees conniving with fraudsters is worrisome.
"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," FM Jaitley said.
Also worrisome is that no red flag was raised.
" If a fraud is takng place in multiple branches of 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," cautione Jaitley, adding,"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 seat.
Speaking at the ET Global Business Summit, he said the industry needs to get into the habit of doing 'ethical' business as such frauds are "scars" and push reforms and ease of doing business to the background.
Unethical behaviour in the lender-borrower relation has to end, he said.
"If needed laws will be tightened further to punish delinquent persons."
He also slammed bank management for failing to do their job saying inadequate supervision and top management being unaware of what was going on in the bank was worrisome.
Besides this FM also spoke on the elction sceneriao, "From both governance and expenditure point of view to have 2-3 elections every year is a serious challenge. At least if elections are held every 5 years India will see comfortable governance at the Centre and state, and policy formulation beside lesser expenditure."