PNB case: IBA to meet on Saturday for corrective action

Indian Banks' Association, the apex body of all banks in the country will hold its meeting on Saturday where it may try to fix the responsibility of banks and see how the loose ends can be tied post the Rs 11,400-crore bank credit scam involving jeweller Nirav Modi Group Companies.

The meeting will be held in Mumbai where the IBA will look into the impact of the financial fraud on all the lenders which have been exposed to the risk. As many as 19 public sector and 8 private sectors lenders are said to be exposed to the risk.

Top on the agenda of the IBA meeting will be how to plug the loopholes in the system so that a similar incident does not occur in the banks, informed sources said. Experts have pointed to many regulatory shortcomings in the banking system due to which such incidents are repeated from time to time. The IBA will reiterate its code of conduct on norms of doing business on the officials, sources said.

Separately, the finance ministry has said, it will raise the issue with the RBI as it believes it was a negligence on part of the Central bank due to which the fraud continued for nearly 7 years. Meanwhile, in a communication with PNB, the RBI has asked the lender to pay up all the dues to other lenders who have run into losses due to its fake LoU.