In a significant clarification, trouble-hit Punjab National Bank has asserted that the Reserve Bank of India does indeed carry out annual risk-based supervision of the bank.
“There have been reports in a section of media that Reserve Bank of India has not conducted any audit at Punjab National Bank Brady House, Mumbai branch since 2009. It may be clarified that RBI does risk-based supervision of the bank on annual basis,” the bank said. The bank clarified this through its Twitter handle.
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The second largest public sector bank in India has been under intense public glare ever since the detection of the fraud that involved diamond trader Nirav Modi and Mehul Choksi, owner of Gitanjali Gems.
The fraud involved the issue of letters of undertaking (LoU) without margin money and sanction. The amount involved in the alleged fraud has since escalated to ₹12,600 crore.
The PNB clarification on risk-based supervision by the banking regulator is bound to raise more questions on the larger issue of accountability in the banking sector.
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