Expanding its crackdown to contain the fallout from India’s biggest banking fraud – the Rs 114-billion scam at Punjab National Bank – involving Nirav Modi, one of the country’s richest men, the Reserve Bank of India (RBI) on Tuesday constituted an expert panel to be headed by former RBI board member Y H Malegam.
The committee will look at the divergence in asset classification and provisions reported by banks vis-à-vis those interpreted by the central bank’s auditors, and also examine the rising incidence of fraud in the banking system.
Malegam, who was director of the RBI board for 17 years, has known to be the government’s go-to man for advice on a wide range on issues in myriad crises at different times – quite like Justice B N Srikrishna, who has headed several expert panels set up to look at issues of importance to the economy and the country at large.
Business Standard looks at their assignments to gauge what makes them the trusted men:
Yezdi Hirji Malegam
* This panel is to look into the entire gamut of issues relating to classification of bad loans, rising incidents of frauds and effectiveness of audits* In the Rs 114-bn Punjab National Bank fraud case, the RBI has set up an expert committee under the chairmanship of Malegam
* The panel will look into the causes of fraud at lenders and the reason for their failure in identifying defaulters.
* Earlier, Malegam was director of the RBI’s board for 17 years
* Malegam led a 1995 review of disclosure requirements for public issues. Under his recommendations, Sebi issued guidelines, such as those for companies declaring loans to subsidy companies
* Malegam was later appointed the chairman of the famous Malegam Committee set up to study issues and concerns of the MFI Sector.
This committee gave its report to the RBI in January 2011 contending that the microfinance institutions have neglected the poor.
* Malegam was also the member of the Financial Sector Legislative Reforms Commission set up in 2011 to amend the financial laws in India. But Malegam submitted a dissenting note to the Commission's Report, arguing RBI should control all capital flows except FDI.
* Malegam received the Padma Shri Award, the fourth-highest civilian award in the country, in 2012
Justice Bellur Narayanaswamy Srikrishna
* Justice B N Srikrishna is an Indian jurist and a retired judge of the Supreme Court of India
* Srikrishna headed a Committee of experts set up to deliberate on a data-protection framework for India.
* The government had set up this committee and tasked it with studying various issues related to data protection and making specific suggestions for the data protection Bill
* From 1993–98, he headed the Srikrishna Commission that investigated causes and apportioned blame for the Bombay Riots of 1992–93
* He is currently the chairman of the Financial Sector Legislative Reforms Commission (FSLRC).
* Srikrishna headed the Sixth central pay commission set up by the Union Cabinet on 5 October 2006.
* He had also headed the Srikrishna Committee on Telangana to look into the demand for a separate state or keep the state united with Andhra Pradesh.