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This is what finance minister Arun Jaitely says about ‘PNB fraud case’

This is what finance minister Arun Jaitely says about ‘PNB fraud case’

In his first remarks on the Punjab National Bank scam that erupted last week, Finance Minister Arun Jaitley on Tuesday appeared to blame the PNB management and auditors for the Rs. 11,300 crore fraud that the celebrity diamond designer Nirav Modi had been able to pull off.

Jaitley, who called for additional mechanism to nip stray cases in the bud, underlined frauds such as the one staring the government-run in its face, not only had a direct cost on the country and the taxpayer but an indirect cost on borrowings and development as well.

Jaitley said when bank managements get the authority to take decisions, they are expected to utilise it effectively and in the right manner. The question for the bank management was if they were found lacking.

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“On the face of it, it seems they were,” Mr Jaitley said about the scam that the Punjab National Bank had stumbled upon after an official from Nirav Modi’s firm turned up at the bank on 16January to request buyers’ credit to pay overseas suppliers without a collateral.

The official at PNB’s Mumbai branch checked the records when the diamond billionaire’s official insisted that they had been getting similar letters of understanding without any collateral securities in the past.

The bank has so far put the size of the bank fraud, being described as one of India’s largest, at Rs. 11,300 crore but the Congress says there were reports that it would be twice or thrice as much.

The Finance Minister was speaking at the annual meeting of the Association of Development Financing Institutions in Asia and the Pacific in the national capital on Tuesday.

The minister said the banking trust depends on trust and the relationship of borrower and the lender but when a section of business demonstrates a clear lack of ethics, it is incumbent for the state to “chase those who cheat the banking system”, according to news agency ANI.

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