Banking system failed to detect PNB fraud early: TMC MP

Trinamool Congress MP Saugata Roy today said the multi-crore rupees PNB fraud was a result of the failure of the banking system, which could not detect the scam early.
State-run PNB has detected the scam in which billionaire diamond merchant Nirav Modi allegedly acquired fraudulent letters of undertaking (LoUs) from a branch in Mumbai to secure overseas credit from other Indian lenders.
"Nirav Modi's case showed how much the country's banking system failed to detect the fraud early... Fresh thoughts are required to revive the banking sector," Roy said here on the sidelines of a CII-organised event.
He said that lending to the infrastructure sector could be impacted in view of the Rs 11,400 crore fraud.

Infrastructure company SPML Infra Ltd Chairman S C Sethi seconded Roy, and said at least in the short-term, there could be some impact on credit flow as banks will turn more stringent in evaluating the viability of projects.