Industry body PHDCCI president Anil Khaitan expressed concern over the crisis triggered in the banking industry after the Nirav Modi led PNB Scam episode and said the current situation may lead to an unnecessary tightening of norms and procedures in raising capital from banks.
Khaitan further said he is surprised how the banks’ internal audit system failed to detect anomalies in transactions leading to the alleged fraudulent loans given out to the borrowers. “The current situation is worrying for Indian industry since it may lead to an unnecessary tightening of norms and procedures in raising capital from banks.
“This will, in turn, hurt the positive sentiment generated in ease of doing business and can potentially gravelly impact the policy,” he said.
Khaitan also said that instead of making changes in the loan seeking mechanism, stringent steps should be taken by the Central Bank to strengthen the bank’s internal audit procedures.