Mumbai, Feb 20 (IANS) In wake of the $1.8 billion fraud unearthed in the Indian banking system, there is a need for a structural organisation above banks to decide on the accountability, an industry expert said.
“There has to be something or some larger structural organisation in the system which has to address. We cannot leave it banks and board of the banks. The structure does not exist if the regulator does not want to directly get into it. Maybe, they have to create some structure which is above banks,” Ashvin Parekh Advisory Services’ Managing Partner Ashvin Parekh told BTVI in an interview.
He also said the decisions of accountability cannot be left to banks and their boards.
“Let there be a structure which will examine the accountability and which bank should take up the liability,” Parekh said, adding that the larger issue for the economy would be the restoration of trust in the banking system.
He said there is a need to wait till all the facts and facets of the fraud are established and banking system is diverse and dispersed.
According to him, the Punjab National Bank fraud has only exposed one area and it showed vulnerabilities of the India banking system.
Bank officials and borrowers both were culpable in finding loopholes of the system, he added.