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Parliamentary Committee summons RBI Governor amid banking scams

ANI  |  New Delhi [India] 

Amid the scams unearthed in the recent past, the has reportedly summoned (RBI)

As per sources, the RBI has been summoned to appear before the Committee on May 17 in the wake of recent scams and the issue of non-performing assets (NPAs).

Sources further claimed that the decision to summon the Reserve Bank was taken during a Committee meeting held earlier in the day, attended by former and senior M Veerappa Moily, among others.

A number of scams have surfaced in the recent past involving state and such as (PNB), ICICI Bank, and so on.

Earlier in March, had stated that it was not possible for any regulator to catch or prevent all frauds.

Delivering the inaugural lecture at National Law University, Gandhinagar, Patel said, "There has been a tendency in the pronouncements post revelation of the fraud that RBI supervision team should have caught it. While that can always be said ex post with any fraud, it is simply infeasible for a regulator to be in every nook and corner of activity to rule out frauds by 'being there'. If a regulator could achieve such perfect outcomes, it would effectively imply that the regulator can do anything that banks can do, and by implication, can simply perform the entire intermediation activity itself".

Furthermore, Patel noted that the RBI had issued precise instructions via three circulars in 2016 to all banks to eliminate such hazards, but PNB failed to follow instructions.

He also said that it is essential for regulatory powers to be ownership neutral.

In case of private banks, Patel said the real deterrence arises from the market and regulatory discipline.

On a related note, the (CBI) earlier this month had questioned former RBI Deputy in connection with the Rs. 13,500 crore PNB scam involving billionaire

The CBI also questioned four other RBI officials in connection with the said scam, the noted diamantaire and his maternal uncle and partner are prime accused.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, April 17 2018. 18:45 IST
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