PNB says tightened credit norms to curb frauds, ensure fair evaluation
Punjab National Bank had reported an alleged fraud of over Rs 13,000 crore by diamantaire Nirav Modi in February-March this year.Updated: May 01, 2018 21:55 IST
Punjab National Bank (PNB) on Tuesday said it has tightened bank’s credit underwriting norms to curb frauds and has put in place an off-site monitoring to identify risks.
“The bank has strengthened the process of underwriting of credit to wean out any possibility of fraudulent behaviour and ensure a fair evaluation,” the bank said in a statement.
The second largest public sector lender had reported an alleged fraud of over Rs 13,000 crore by diamantaire Nirav Modi in February-March this year.
The process is divided into four components with different employees focused on sourcing; appraisal, processing and underwriting; documentation and disbursement and recovery, PNB said.
“Internal audit process has been augmented to give higher weightage to the off-site monitoring mechanism. The analysis from the off-site monitoring mechanism will reduce dependence on physical inspection and audit to identify risks and the detachment between the front office and offline monitoring system will drive greater transparency in reporting,” the bank said during its circle head conference held here yesterday.
The guidance from PNB leadership for 2018-19 is total business of Rs 12 lakh crore which will account for 10.8 per cent year-on- year growth, the bank said.
NITI Aayog CEO Amitabh Kant, who was present at the occasion, asked PNB to stay determined, recognise gaps, recapitalise, resolve and reform.
Responding to a question on privatisation, Kant said “the government is not interested in privatisation of public sector banks (PSBs)”.
“Today, what (PNB) should aspire for is to stay competitive. It must relook at its business processes, its market positioning and understand what the competition is doing to stay ahead of the curve,” said Sunil Mehta, managing director and chief executive officer of the bank.
The ‘Mission Parivartan’ team at PNB will serve as the bank’s own think-tank to drive change, he said.
PNB has “the capability and capacity to come out of this situation”, Mehta said, highlighting various steps taken recently to curb frauds such as ‘Mission Parivartan’, revamping of credit underwriting and strengthening internal audit mechanism, he added.