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Arun Jaitley blames regulators and auditors for PNB fraud

Union Finance Minister Arun Jaitley has blamed bank regulators, auditors and managements for the recent Punjab National Bank (PNB) fraud involving estranged billionaire jeweller Nirav Modi that is being termed as India’s biggest ever bank fraud case.

While speaking at a business summit in Delhi, Jaitley said only politicians are held accountable in the present system, while regulators are generally let off when large scams and instances of wilful default take place these days.

Without explicitly naming Nirav Modi or PNB, Jaitley said banks need to be more “ethical” in their business approach because the scams that take place in the absence of banks’ keen attention affect India’s image in terms of its global ‘ease of doing business’ rankings.

While targeting PNB specifically, Jaitley expressed worry over the fact that the fraud involved several branches and employees, but nothing still came to the light when it was happening. He also blamed auditors for having overlooked these illegal activities during their regular checks, either intentionally or casually.

The government has taken several strict measures in the PNB-Nirav Modi case through investigative agencies like CBI and Enforcement Directorate. On the other hand, industry associations like ASSOCHAM have urged banks not to hamper corporate lending following this scam and have asked the government to make the law more watertight to prevent such incidents in the future.

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