Xinhua, Mumbai :
The rupee has been pushed lower in recent sessions due to an increase in demand for dollars as banks exercise more caution over issuing buyer’s credit, letter of credit (LC) and similar instruments for trade finance in the wake of the fraud uncovered at Punjab National Bank (PNB), the biggest banking fraud in India thus far.
In a series of announcements on Tuesday evening, the finance ministry announced that it had asked all state-run banks to look for possible fraud in all loans above 50 crore (800,000 USD) that had turned bad.
Rajeev Kumar, secretary in the department of financial services, also pointed out that it had set a 15-day deadline for public sector banks to improve “oversight of operational and technological risks.”
These developments are a form of damage-control, but analysts and senior bankers believe that it could further harm bank credit growth in the short-term and put a wrench in the government’s bank recapitalisation programme which was announced in late 2017.
On Monday, a special Prevention of Money Laundering Act (PMLA) court allowed the Enforcement Directorate’s (ED) plea seeking issuance of Letter Rogatory to competent authorities in six countries to aid the identification and seizure of Nirav Modi’s properties abroad.
The rupee has been pushed lower in recent sessions due to an increase in demand for dollars as banks exercise more caution over issuing buyer’s credit, letter of credit (LC) and similar instruments for trade finance in the wake of the fraud uncovered at Punjab National Bank (PNB), the biggest banking fraud in India thus far.
In a series of announcements on Tuesday evening, the finance ministry announced that it had asked all state-run banks to look for possible fraud in all loans above 50 crore (800,000 USD) that had turned bad.
Rajeev Kumar, secretary in the department of financial services, also pointed out that it had set a 15-day deadline for public sector banks to improve “oversight of operational and technological risks.”
These developments are a form of damage-control, but analysts and senior bankers believe that it could further harm bank credit growth in the short-term and put a wrench in the government’s bank recapitalisation programme which was announced in late 2017.
On Monday, a special Prevention of Money Laundering Act (PMLA) court allowed the Enforcement Directorate’s (ED) plea seeking issuance of Letter Rogatory to competent authorities in six countries to aid the identification and seizure of Nirav Modi’s properties abroad.
