- Government banks in the country are already facing the problem of non-performing capital. Recently, this problem became more serious when the biggest banking scandal ever witnessed in the history of the country. This scam is about 1.77 billion dollars or approximately 12 thousand crore rupees in the Mumbai branch of Punjab National Bank.
- The information of the scam itself was given in the stock market by and from the Punjab National Bank. The bank said that some disturbances have been registered in its Mumbai branch. Some account holders were lent to profit. On the basis of these transactions, other banks have lent money abroad to customers.
The main reasons responsible for this country's biggest banking scam:
- The biggest reason responsible for this deal is the LOU-Letter of Undertakings issued by the Punjab National Bank.
- LOU is a form issued on behalf of a bank branch to another bank branch which a guarantee is given in favor of fixed account holders. On the basis of this guarantee, the second branch of the bank provides the facility of credit to that customer.
- Jewelry trader Neerav Modi and other customers obtained LOU from the Mumbai branch of Punjab National Bank and received loans in other countries on the basis of these LOUs.
- This scam was going on since year 2010 but nobody came to know because the customers were paying their debts on time.
- When the Reserve Bank of India responded in this regard, there was no way other than to make it public before PNB.
Measures to deal effectively with these types of problems:
- KYC (Know Your Customer) rules should be made strict through banks so that adequate information is available to the banks regarding each customer.
- Fast track courts should be set up separately for corrupt employees belonging to the banking sector and the samples should be settled within the stipulated time.
- In relation to banking corruption, more powers and powers should be provided to the Enforcement Directorate.
- A Banking Intelligence Unit should be constituted to identify such cases and to prevent recurrence of such cases in the future.
Conclusion:
It can be concluded that the banking system is heading towards corruption in the country. This corruption is becoming more serious since the monopolization. To control this, the above mentioned measures need to be implemented as quickly as possible.
