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27 February 2018
 |
Bank
(The Total Investment & Insurance Solutions)
The
government has asked public sector banks to examine non-performing assets worth
more than Rs50cr for frauds. Any newly identified NPA for fraud would propel
the bank to make higher provisions in the coming period, which would dent PSU
bank’s profitability. The PSU Bank stocks are expected to react negatively to
this news tomorrow.The Total Investment & Insurance
Solutions
Further, banks have also been asked to promptly identify frauds and take action within prescribed deadlines. Earlier today, the government had given public sector banks 15 days to identify weaknesses and take pre-emptive action against rising operational and technological risks. PSU Banks have been given 15-day deadline to take pre-emptive action and identify gap/weakness to gear up for rising operational and technical risks.
These measures come in the wake of a massive fraud recently detected at Punjab National Bank, the size of which could swell to as much as $2bn. On February 14, PNB told that it had unearthed a $1.77bn fraud at a branch in Mumbai. The fraud involved issuance of unauthorised letters of undertaking that were used by companies led by diamond traders Nirav Modi and his uncle Mehul Choksi. The state-owned bank said the quantum of reported unauthorized transactions could rise to ~Rs1,300cr.The Total Investment & Insurance Solutions
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